Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

Oral Answers to Questions

WALES

Sex Equality

Mr. D. E. Thomas: asked the Secretary of State for Wales what recent representations he has received regarding the development of sex equality within his Department and generally within Wales.

The Secretary of State for Wales (Mr. Nicholas Edwards): I have received no recent representations. However, my Department is implementing a programme of action agreed with the Council of Civil Service Unions in response to the recommendations of the joint review group on employment opportunities for women in the Civil Service. More generally, my Department has kept in touch with the Equal Opportunities Commission over several years about the appointment of women to public bodies in Wales.

Mr. Thomas: Is it not time for the Secretary of State to start within his Department and with his own nominations? He told me only recently in the House that 31 out of the total of 206 persons appointed by himself to serve on public bodies were women. What does he intend to do to ensure equality of representation on public bodies in Wales?

Mr. Edwards: I seek to find as many people as I can to fill the needs of those public bodies. I should welcome more women putting their names forward so that we can consider them. I have appointed women to a number of important public bodies in Wales and shall continue to do so, but it is not always as easy as one would like to find as wide a cross-section of people as one needs for the particular appointments.

Mrs. Clwyd: Does the Secretary of State agree that thousands of women have been denied training opportunities in Wales because the Government have refused to publicise a section of the EEC social fund, as they believe that it discriminates against men?

Mr. Edwards: I do not believe that that allegation is true. The Government have rightly pursued vigorously a policy of treating women on a basis of absolute equality. I repeat that it is our objective to see as many women as possible employed in public bodies for which I am responsible in Wales.

Mr. Ron Davies: Does the Secretary of State appreciate that the overall impact of the Government's economic policies on the people of Wales, particularly women, has had a dramatic effect? The public sector, particularly the NHS, education and social services, and indeed the private sector in terms of small industries, have been hardest hit, and those are the areas which traditionally have provided employment opportunities for women. Will the Secretary of State now look at the impact of his policies on Wales and, if necessary, seek Cabinet approval for a change in those policies?

Mr. Edwards: The percentage increase in the number of unemployed women has risen only a little more than the increase in the number of unemployed men. It would riot be right to change policies which are already producing the considerable upturn in economic activity, which is evidenced by the survey published only today by the CBI.

Coal Industry Dispute

Mr. Ray Powell: asked the Secretary of State for Wales what assessment he has made of the effect of the current miners' strike on the economy in Wales.

Mr. Nicholas Edwards: All reports confirm that Welsh industry generally is continuing to operate without serious disruption.

Mr. Powell: I anticipated that complacent attitude in the usual reply of the Secretary of State for Wales. I am rather surprised. Where does his statistical evidence come from? Apparently, the CBI has said something completely different——

Mr. Best: Ask a question.

Mr. Powell: Does the hon. Member for Ynys Môn (Mr. Best) wish to intervene?
Has the Secretary of State looked into the number of people in Wales who have been made unemployed as a result of the mining strike? Does he realise that billions of pounds have been wiped off the balance of trade figures because of the use of oil instead of coal? Does he appreciate the different views that industrialists are expressing about the number of people being made unemployed by the miners' strike? Will he be less spineless in the Cabinet and do the same as the miners and Arthur Scargill in trying to get and save jobs in Wales and the rest of the country?

Mr. Edwards: I receive daily reports of the industrial situation in Wales. The CBI says that the coal dispute has had little impact so far although, regrettably of course, it is having an impact on the coal industry. I hope that the hon. Gentleman will encourage those who are seeking to persuade the miners in this damaging dispute.

Sir Anthony Meyer: Has my right hon. Friend been able to make any estimate of the number of jobs in the coal industry in Wales which may have been lost as a result of the loss of markets in this strike, and has he any assessment of the number of pits which may have become permanently damaged in consequence of the strike?

Mr. Edwards: I have no figures, but it must be clear that if markets are lost, or if pits are not adequately maintained, there may be consequences in terms of future job losses.

Mr. Anderson: We understand that, as part of a package deal, the NCB is offering new investment in the affected areas. If that is so, will the Secretary of State ensure that the Margam pit investment is high on that agenda?

Mr. Edwards: I have already told the House that the board is reconsidering a possible investment in the Margam pit, and it is of course for the board to take decisions on that matter.

Mr. Skinner: Is the Minister aware that some people in the mining industry, and outside it, say that the only time that the Secretary of State for Wales begins to shake himself about anything is when the Prime Minister's husband sends him a letter? Is he also aware that we do not expect other than complacent answers from him, because it is well known that the miners are on the road to a historic victory, especially now that the chairman of the coal board has been put on the substitutes' bench, and that he, the Prime Minister and the rest of the Cabinet are due to get the biggest political and industrial good hiding that they have had in their lives?

Mr. Edwards: What remains true, as it has throughout the dispute, is that a large number of miners are continuing to work, and many more wish to work.

Mr. Harvey: As the great majority of miners who are affected by closures have been offered jobs in other pits, will the Secretary of State urge the miners to go back to work forthwith in Wales?

Mr. Edwards: Quite clearly, the sooner this damaging strike is ended, the better. I hope that negotiations will lead to a successful conclusion and that we shall return to a situation in which the industry can have a future based on the substantial investment being made by the Government.

Mr. D. E. Thomas: Will the Secretary of State speak to his hon. Friend the Minister for Social Security and ensure that that Minister does not penalise the families of strikers in south Wales who are making sacrifices to defend the jobs of their husbands and their sons?

Mr. Edwards: I shall draw my hon. Friend's attention to the question that has been put.

Mr. Terlezki: Is my right hon. Friend aware how much financial contribution, if any, miners' leaders have made to the striking miners, since £35 million of the National Union of Mineworkers is stacked away, and the miners, according to some Opposition Members, are going hungry?

Mr. Edwards: Fortunately, I have no responsibility for that matter, and therefore I do not propose to answer questions on it.

Mr. Barry Jones: The proposed pit closures could mean the economic and social death of valley communities in south-east Wales. Does the right hon. Gentleman agree that what is now required is an urgent, statesmanlike intervention by the Secretary of State for Energy and the Secretary of State for Employment so that genuine negotiations with a view to a settlement rather than Cabinet disengagement might come forward? Will he undertake to intervene in this direction, and will he say that he will fight for more new pits in south Wales and for more investment in the coalfields?

Mr. Edwards: I do not believe that Government intervention is required to produce genuine discussion and negotiation.

Less-favoured Areas

Mr. Best: asked the Secretary of State for Wales how many hectares of land were added in the recent extension of less-favoured areas designation in Wales; and what proportion of the total agricultural land is now covered by the less-favoured areas criteria.

Mr. Nicholas Edwards: The decision by the Council of Ministers on 28 February to extend the United Kingdom's less-favoured areas added 389,600 hectares to the 967,000 hectares originally designated in Wales. Some 80 per cent. of the agricultural land in the Principality is now designated as less favoured.

Mr. Best: Is that not just one more example of the great success that this Government can have in Europe in trying to achieve benefits for the people of Wales as members of the EEC? Is my right hon. Friend aware that the decision is widely welcomed throughout the Principality, particularly in Anglesey? Is my right hon. Friend further aware of the anomalies in the boundaries and in how they differentiate between areas designated as less-favoured


areas and areas not so designated? Is there any chance of that being looked into so that such anomalies are ironed out?

Mr. Edwards: About 9,000 farmers in the newly-designated areas of Wales are expected to benefit, including about 700 farmers in Anglesey. Representations can he made about boundaries. However, the boundaries were settled after a prolonged period of consideration and any changes would have to be submitted to the European Commission. It would be wrong to hold out hope that changes could be made swiftly or extensively.

Mr. Geraint Howells: What advice can the Secretary of State give to beef and sheep producers in the less-favoured areas if they decide to go for dairy farming instead? Will he give an assurance to beef and sheep producers in Wales that he will not introduce quotas while he is Secretary of State for Wales?

Mr. Edwards: I do not think that beef or sheep producers will switch to dairy farming at present. The question, therefore, does not arise. I cannot say what future Community regimes may require.

Mr. Coleman: If, as the hon. Member for Ynys Môn (Mr. Best) says, the Government's policy is such a great success, why is so much milk flowing down the drains in Wales?

Mr. Edwards: That is because the European Community, over a considerable period, has managed a system which has produced surpluses which cannot be disposed of. This Government have, for a number of years, urged a reform of that system. I do not believe that the hon. Member supports a system which, at vast public cost, produces surpluses that cannot be disposed of.

Dr. Roger Thomas: To what extent have the advantages of the less-favoured areas been completely dispelled by the iniquitous milk agreement reached at the end of March?

Mr. Edwards: There is no doubt that there are real advantages to large parts of Wales, including the hon. Gentleman's constituency, which is now substantially included in the less-favoured areas, and that this designation will be of particular assistance at a time when a number of milk producers will have to change their systems or switch to other forms of production.

Mr. Roy Hughes: Is the Secretary of State aware that many people are concerned about what is to happen to agricultural land in Wales which is suitable only for dairy farming, and, more importantly, what is to happen to the dairy farmers, who feel that they have been badly treated? Why can a little republic such as Ireland achieve a much better deal? Where is the bargaining power of the British Government in Europe?

Mr. Edwards: I am certain that the scheme that we announced before the recess for helping smaller producers with 40 cows or fewer will be of particular assistance to Wales and will enable producers to maintain their outputs at 1983 levels.

Housing Programmes

Dr. Marek: asked the Secretary of State for Wales if he will enable local authorities to expand their housing programmes.

The Under-Secretary of State for Wales (Mr. Wyn Roberts): My right hon. Friend will continue to make available to Welsh authorities the maximum housing resources commensurate with the overall need to contain public expenditure.

Dr. Marek: I anticipated that complacent reply, which is no consolation for Welsh people who require housing. Does the Minister realise that Wales is being subjected to the worst housing programme since the 1920s? Is he aware that available finances are spent on maintaining the fabric of housing rather than on building new houses? In the light of that, will the Minister enable local authorities immediately to finance the building of new council houses?

Mr. Roberts: There is a danger of underestimating how much money is being spent on housing in Wales. Last year gross capital expenditure was about £245 million. That was higher in real terms than at any time since 1976–77. A great deal of money is being spent on housing this current year, when we expect to spend about £200 million. The choice between new build, rehabilitation and other forms of housing spend is a matter for local authorities.

Mr. Best: Is not expenditure on public sector housing in Wales and elsewhere in the United Kingdom one of the most cost-ineffective ways of providing housing? Does my hon. Friend agree that far more could be done through housing associations and house renovation and repair grants, to which the Government have devoted a great deal of money?

Mr. Roberts: My hon. Friend is quite right. He may recall that under the Labour Administration public sector new build declined by some 60 per cent. We and local authorities are putting the accent on rehabilitation. Last year alone we spent more on rehabilitation than the Labour Government spent in five years in office.

Mr. Rowlands: Is the Minister not aware that tens of thousands of Welsh householders are condemned to eternal waiting for home improvement grants and that 3,600 of them are in the Merthyr borough? Will the Minister sit down with the Welsh local authorities and try to shorten the unending waiting lists that have accumulated and help home owners to improve their houses? If the accent is on improvement, why does not the Minister help local authorities to help householders to improve their homes?

Mr. Roberts: I am glad to tell the hon. Gentleman that I have already sat down with Welsh local authority representatives on the Welsh housing consultative committee to discuss the problem with them. We are very glad that a tremendous influx of applications for improvement grants has resulted from the measure in the 1982 Budget introduced by my right hon. and learned Friend the Member for Surrey, East (Sir G. Howe) when he was Chancellor. I am glad to tell the hon. Gentleman that about half of those applications have been dealt with or are in the process of being dealt with. There are, nevertheless, about 74,000 applications awaiting processing, approval and implementation. We are concentrating on trying to resolve that problem.

Mr. Hooson: Does my hon. Friend agree with my estimate that we may have halved the number of unfit Welsh houses since 1980–81 as a result of the wide implementation of the improvement grant system?

Mr. Roberts: There is no doubt that the 1976 and 1981 house condition surveys revealed considerable unfitness and need for repair and rehabilitation of housing in Wales. That is why the Government have adopted the rehabilitation policy, which has been backed by local authorities. We are all concentrating on rehabilitation. We sincerely hope that the next house condition survey in 1986 will show much improvement in the state of the Welsh housing stock.

Mr. Barry Jones: Is the Minister not ashamed that hundreds of elderly Welsh citizens are likely to die before their dilapidated homes are repaired? Is he not disturbed that when tens of thousands of Welsh construction workers are on the dole there are growing queues of homeless people seeking council tenancies? His policies are in ruins. They are a disgrace.

Mr. Roberts: Let me stress just once again that last year we spent £100 million on improvement grants, more than was spent in five years under the Labour Government. With regard to the elderly, I urge from the Dispatch Box that local authorities should give them priority if they are on the waiting list for improvement grants. I remind the hon. Gentleman that the 90 per cent. rate of improvement grant will still be available to those in hardship.

Welsh Forestry Commission Land

Mr. Hooson: asked the Secretary of State for Wales what is his evaluation of the prospects for further sales of Welsh Forestry Commission land in the course of the present Parliament.

The Minister of State, Welsh Office (Mr. John Stradling Thomas): The Forestry Commission has been asked to raise £82·1 million from property ales in Great Britain over the six-year period to 31 March 1987, but no specific share of the sales programme has been allocated to Wales.
However, between the passing of the Forestry Act 1981 and 21 April 1984 receipts from disposals in Wales amounted to £6·8 million and further properties to the value of some £5·5 million were in the process of being sold at that date. It is not possible at this stage to give any firm indication of the further properties that might be identified by the commission for sale or their value.

Mr. Hooson: Does my hon. Friend agree that private capital to create and maintain jobs is just as welcome in rural as in industrial Wales? Does he further agree that too little has so far been done to promote the realisation of forestry's considerable potential contribution to the Welsh countryside, jobs in rural Wales and the balance of payments?

Mr. Stradling Thomas: I very much agree with my hon. Friend. We want to see a flourishing public sector and a flourishing private sector, for the reasons which my hon. Friend has so well stated.

Mr. Rogers: Will the Minister ensure that purchasers of Forestry Commission land, especially in the south Wales mining valleys, fulfil their obligations towards the community? The Forestry Commission has clearly not

been doing that and in areas such as the Rhondda the vandalism of the encroaching green forests has created enormous run-off and flooding problems, which have led in turn to excessive flooding at the top end of the valley. The Minister's colleague has refused to do anything about it or to convene a meeting of the interested parties, including the Welsh water authority, the Forestry Commission, and the county and district councils. When will the Welsh Office accept responsibility for the flooding of homes in the Rhondda?

Mr. Stradling Thomas: I should be most interested if the hon. Gentleman would provide me personally with evidence for those allegations. He must be aware that I pay great attention to forestry policy and its relationship to the countryside in both industrial and rural areas.

Sir Raymond Gower: Will my hon. Friend do all in his power to ensure that when forestry houses are sold their occupiers are given special consideration?

Mr. Stradling Thomas: I have noted that point and will give it further consideration.

Mr. D. E. Thomas: Is the Minister aware of the concern expressed by the planning authorities, particularly in national parks, about the effect of sales on the environment? Will he ensure that no sales take place without prior consultation with the national park committees?

Mr. Stradling Thomas: The Forestry Commission certainly takes that into account in its disposals policy for national parks and areas of outstanding natural beauty.

Mr. Soames: Is my hon. Friend satisfied with the method of sale and the realisation of those forestry assets when they are sold on the open market?

Mr. Stradling Thomas: Yes, I am satisfied that good management considerations are fully taken into account by the commissioners.

Local Authority and NHS Expenditure

Mr. Grist: asked the Secretary of State for Wales what percentage of (a) local authority and (b) National Health Service current expenditure in Wales is accounted for by pay and associated costs.

Mr. Wyn Roberts: The latest available information indicates that 78 per cent. of local authority expenditure is accounted for by pay and associated costs. The corresponding figure for Welsh health authorities and the Welsh health technical services organisation is 75 per cent.

Mr. Grist: Given the various pay claims now being made, does my hon. Friend agree that his answer underlines the importance of restraint in public pay if we are to conquer and finally end inflation?

Mr. Roberts: I agree wholeheartedly with my hon. Friend. Expenditure by public sector bodies must be contained within a level that the public can afford. Unrealistic pay settlements only mean cuts elsewhere in the services and in employment.

Mr. Ray Powell: Will the Minister now say how much is being spent both inside and outside Wales on policing the miners' pickets? I am given to understand that a number of mid-Glamorgan policemen are being sent to other areas. As pay and associated matters are involved,


may we be told whether local authorities will be reimbursed in full for expenses incurred on such policing duties?

Mr. Roberts: Statements have already been made on that point, which is very much a matter for the Home Secretary.

Mr. Wigley: May we have an assurance that maintaining the level of local services, particularly in the NHS, will not be done at the expense of the pay of people who are already paid very poorly indeed?

Mr. Roberts: I do not agree with the hon. Gentleman. There has been an increase in the number of people employed in the NHS and, for obvious reasons, we are anxious that they should be employed as efficiently and effectively as possible. The question of pay is for Whitley council negotiation.

Mr. Best: Is my hon. Friend aware that it would be a gross dereliction of duty on the part of the Government towards nurses and others in the public sector who spend much of their time and effort caring for people if the Government were to succumb to the demands of a sector of society which has greater industrial muscle and which seeks to take what it wants in increased pay by industrial force rather than through negotiation?

Mr. Roberts: Negotiation is always to be preferred. We had some experience of industrial action in the NHS in 1982, as a consequences of which waiting lists increased.

Mr. Roy Hughes: Will the Minister be magnanimous and admit that local authorities are doing a splendid job with the most inadequate resources? Is he aware—he must be—that wages in the NHS are notoriously low and that no proposal has yet been put forward, even by the present Government, to replace nurses by robots?

Mr. Roberts: I am sure that Mr. Speaker would not permit me to turn this into a general discussion of how worth while are the local government services in general and the NHS in particular. The services which they provide are, of course, valuable. About 150,000 people in Wales are employed in local government and about 54,000 in the NHS.

West Glamorgan County Council

Mr. Anderson: asked the Secretary of State for Wales what figures were included in the grant-related expenditure assessment for 1984–85 of West Glamorgan county council in respect of free bus travel for schoolchildren.

Mr. John Stradling Thomas: The grant-related expenditure assessment is based on the fundamental principle that block grant is paid to support local authority expenditure generally and is not earmarked for particular services.

Mr. Anderson: Will the Minister come clean and admit that the Welsh Office forced these cuts in free school transport on West Glamorgan because there were no other options available in time? Is the Welsh Office aware of the danger to schoolchildren on our busy roads? Is the Minister aware of the anger of parents and the distress which is being caused to families on low incomes in an area of high unemployment and high bus fares as a result

of these cuts? Will he remove the pressure that has been placed on local authorities and withdraw the cuts? When will the cuts that are being made by the Government in our education services come to an end?

Mr. Stradling Thomas: I shall, as always, come clean with the House and refute what the hon. Gentleman said about the imposition of my right hon. Friend's decision on the local authority. After taking account of inflation, spending on education has remained virtually unchanged since the mid-1970s. Since that period pupil numbers have fallen by over 10 per cent., while teacher numbers have fallen by 6 per cent. As a result, the pupil-teacher ratio is now at its most favourable level ever and spending per pupil has also increased.

Mr. Williams: Does the Minister understand that his answer was to a question that has not been asked? Does he realise that the irrelevant point that he was trying to make lacks any credibility in West Glamorgan and that the people of West Glamorgan regard it as an act of political cowardice for the Government to try to deny responsibility for the social consequences of the cuts which they are imposing on the local authority?

Mr. Stradling Thomas: Again, I refute the suggestion that the cuts are imposed by the Government. The decision is one for the local authority and it would not be right for my right hon. Friend to intervene when the responsibility for such a policy decision is entirely one for the local authority. I was interested to read in Friday's newspapers that the authority is considering ways of helping parents and others who are prepared to help themselves. That is a matter for the authority and not for Ministers.

Mr. Coleman: Does the Minister recall that I warned his right hon. Friend the Secretary of State during the debate on the rate support grant settlement for Wales that if he pursued his proposals for West Glamorgan there would be cuts of £2 million in the education budget? Is he aware of the anger of parents that is being expressed in West Glamorgan at the effect of the cuts, the details of which have already been given? Will he relent before he does further damage to the fabric of education in West Glamorgan?

Mr. Stradling Thomas: I can only repeat that it would be inappropriate for my right hon. Friend to exercise his powers of direction in circumstances when, as in this instance, it appears that the authority is acting in accordance with its obligations under the law and is responsibly trying to find a way of meeting understandable anxiety, especially on the safety issue mentioned by the hon. Member for Swansea, East (Mr. Anderson). It is trying to be as helpful as it can within certain limitations.

Hip Replacement Operations

Sir Anthony Meyer: asked the Secretary of State for Wales what is the average waiting time in Wales for National Health Service hip replacement operations.

Mr. Wyn Roberts: The average waiting time in 1983 for patients admitted from waiting lists in Wales for hip replacement operations was some 31 weeks.

Sir Anthony Meyer: Is my hon. Friend aware that the waiting period in the Clwyd health authority area appears to be substantially longer than "some 31 weeks"? Can he reassure me that there is a possibility of improving the waiting period in Clwyd?

Mr. Wyn Roberts: I regret that my hon. Friend is quite right in saying that the waiting time for hip replacement operations in Clwyd is significantly longer than for Wales as a whole. However, the number of such operations undertaken in the district has almost doubled over the past four years. I am pleased to tell him also that work is being done to increase the number of orthopaedic beds at Abergele and at the Wrexham war memorial hospital, where orthopaedic treatment takes place. This should offer the opportunity of further improvements in the number of elderly people treated.

Mr. Rogers: When does the 31-week waiting period start within the full diagnostic and treatment process?

Mr. Wyn Roberts: The practice varies throughout Wales and I was fairly careful in my choice of words. People are admitted from the waiting list for hip operations.

Roads

Mr. Wigley: asked the Secretary of State for Wales how much money is being spent during the current financial year on the maintenance and improvement of (a) trunk roads and (b) other roads in Wales; and how much of each of these figures arises from contributions made by the European Economic Community.

Mr. John Stradling Thomas: Provision has been made for £115·455 million to be spent on improvements and £8·940 million on maintenance of trunk roads during 1984–85. A provision of £57 million has been made for improvements to other roads and £78 million for their maintenance. As indicated in the 1984–85 Supply Estimates, published in March 1984, payments of European regional development fund grant in respect of improvement works undertaken by local authorities are expected to be of the order of £15 million.

Mr. Wigley: Does the Minister accept that, given the poor state of roads in Wales, especially compared with continental Europe, the need to develop fast, modern roads in Wales, the minuscule contribution from the EEC and the fact that the EEC is giving substantial development grants to areas such as Schleswig-Holstein, which are 25 per cent. better than the average level of income for the EEC, it is high time that Wales received a better bargain from the EEC, especially for infrastructure?

Mr. Stradling Thomas: I can hold out no great promises on that matter. The House will be aware that a review of the European development fund is being conducted, and a considerable degree of agreement was reached at the Foreign Affairs Council on 14 May. I hope that the remaining points of detail will be resolved in the near future. I do not hold out any great hope of an improvement along the lines that the hon. Gentleman would like, but, as the House knows, Wales is getting considerable help.

Mr. Hooson: When my hon. Friend meets the county councils, will he take special notice of the provisions for strengthening rural bridges, because the growing average size of lorries creates some problems for delivery in rural areas?

Mr. Stradling Thomas: I shall certainly take account of my hon. Friend's point.

Mrs. Clwyd: Does the Minister agree that, if the Government were to change their rules on additionality, many more roads in Wales would benefit from EEC funds?

Mr. Stradling Thomas: I realise, with great pleasure, that this is my first exchange with the hon. Lady. She is understandably well aware that there are established arrangements for the treatment of the European grant in respect of schemes undertaken by Exchequer-funded bodies. The logic of the hon. Lady's proposal is that schemes which would otherwise merit funding as a matter of priority should be supported by the Commission. As the hon. Lady knows, probably better than any other hon. Member, that is not the way in which the fund is intended to operate.

Labour Statistics

Mr. Barry Jones: asked the Secretary of State for Wales how many people (unadjusted and inclusive of school leavers) are unemployed in Wales; and by what percentage unemployment has increased since May 1979.

Mr. Nicholas Edwards: Last month there were 168,799 unemployed claimants in Wales. In May 1979 the estimated number of claimants was 77,177, an increase of 118·7 per cent.

Mr. Jones: Are not those sombre, disturbing and tragic figures a bleak reminder that Wales is rapidly approaching the point when 50 per cent. of its unemployed people will be long-term unemployed? Can I persuade the right hon. Gentleman to increase urgently and significantly the budget of the Welsh Development Agency? For how much longer will the right hon. Gentleman come to the Dispatch Box as the hapless apologist for Cabinet policies which doom Wales to long-term and mass unemployment?

Mr. Edwards: I am sure that the hon. Gentleman welcomes the CBI's trend survey, which was published today, and the April Wales survey, which confirmed a significant improvement in the Welsh economy. It would not be right to increase at present the budget of the Welsh Development Agency, but substantial sums are being spent on encouraging new development. Applications for selective financial assistance in the first part of this year are running at an all-time record level.

Mr. James Callaghan: Will the Secretary of State confirm that of those 168,000 unemployed claimants 40 per cent. have been unemployed for more than one year and 20 per cent. have been unemployed for more than two years? What new initiatives does the right hon. Gentleman have to offset the social decay that is eating into families and, indeed, communities in the parts of Wales where that is happening? Would it be more realistic and, perhaps, more honest, to say to those men and women that if present policies continue it is highly unlikely that they will ever get a job again?

Mr. Edwards: I share the right hon. Gentleman's anxiety about the problems faced by the long-term unemployed. The MSC is devoting a good deal of its efforts to the problem to which he referred. I believe that by far the greatest contribution that we can make towards solving these problems is to continue policies that are attracting an increasing number of new companies to establish themselves in Wales, to provide jobs that we need in the future in the new industries.

Mr. Grist: Exactly so. Will my right hon. Friend comment on the new industries that are coming to south Wales, such as the Comdial Corporation, which will be setting up in the constituency of the right hon. Member for Cardiff, South and Penarth (Mr. Callaghan) and Mitel, Inmos and the other major new industries, which are taking the place of the old industries which were closing under the Labour Government?

Mr. Edwards: I could read a long list of new companies which have established themselves during the past 18 months and which will provide many new jobs in Wales. The number of industrial visits, applications and inquiries continues to be extremely high. WINvest, our new inward investment organisation, has had an outstandingly successful first 15 months of operation.

Mr. John: Will the Secretary of State confirm that, not withstanding the visits and interest shown, jobs are still being lost in Wales faster than they are being created? By how much is the trend upwards, and what does he intend to do about it?

Mr. Edwards: Undoubtedly, firms will continue to close as new firms will open. There is a far longer list of new firms opening and new jobs being created now than there is of closures. The Welsh CBI trends survey confirms that labour-shedding has substantially stopped. That is confirmed by the latest unemployment figures. I am sure the hon. Gentleman will welcome the fact that there has been a small reduction.

Sir Raymond Gower: I approve of what my right hon. Friend has said, but is it not obvious that any significant long-term growth must depend largely upon European and international action? Will he continue to press that matter with his colleagues in Cabinet?

Mr. Edwards: I am sure that that is right. Labour party policies, which seem to deny us a future in Europe, would be utterly destructive of job prospects in Wales.

Severn Bridge (Inquiry)

Mr. Roy Hughes: asked the Secretary of State for Wales if his Department will be represented at the Severn bridge tolls inquiry commencing in Bristol on 17 July.

Mr. John Stradling Thomas: My Department will be keeping in close touch with the Department of Transport and will be present at the proceedings.

Mr. Hughes: Why do Welsh Office Ministers allow themselves to be treated with such contempt by the Secretary of State for Transport? Surely this inquiry should be held in Wales. Will the Minister appreciate, and convey to his right hon. Friend the Secretary of State for Wales, that there is considerable anxiety because there has not been a whimper from him about the proposals to increase tolls by 150 per cent., when only last week there were 5-mile queues on this bridge? Is that not a disgusting state of affairs?

Mr. Stradling Thomas: The hon. Gentleman will be well aware, of course, of the answer to the first part of his question. Responsibility for the Severn bridge is in the hands of my right hon. Friend the Secretary of State for Transport. I have never found him contemptuous in any way. We have the closest possible consultations on these matters. As the hon. Gentleman will be aware, I am

worried about the queues. He will be aware that a great deal of resurfacing has been done on the bridge, which has led to the difficulties. There is a precedent for the inquiry, because on a previous occasion, under the Administration supported by the hon. Gentleman, an inquiry was held in exactly the same way — on the other side of the crossing.

Mr. Anderson: Does the Minister accept that the tolls and the future of the Severn bridge are of far more importance and relevance to the economy of south Wales than to the economy of the south-west? Who will make representations at the inquiry about the effect of these increased tolls on Welsh industry and investment?

Mr. Stradling Thomas: I am satisfied that many representative bodies and individuals from Wales will make representations. It is not the role of the Welsh Office to make representations at the inquiry, because we are in the closest possible consultation with our colleagues in the Department of Transport.

Dairy Industry

Mr. Ron Davies: asked the Secretary of State for Wales what effect he expects the recent dairy settlement to have on employment in the industry in Wales.

Mr. Nicholas Edwards: No forecast can be made. It will be for all sectors of the industry to make decisions about their own enterprises. Quotas have now been issued and arrangements for special cases will be announced as soon as possible. We have announced arrangements for easing the burden on small producers by buying up quota from outgoers and reallocating it.

Mr. Davies: Will the right hon. Gentleman confirm that initial estimates suggest that 2,000 farmers will be taken out of the dairy industry in Wales? Does he recognise that that sacrifice is being made to allow other European countries to expand their dairy industries, and that insult will be added to injury when dairy products from Ireland are imported into Wales? If the Secretary of State has betrayed his own constituency and political supporters in this way, what hope is there for the rest of the people of Wales?

Mr. Edwards: I do not recognise the figure of 2,000. It is a figment of the hon. Gentleman's imagination. The Community as a whole is seeking to reduce surpluses throughout the Community as a whole. I am certain that the scheme that we have announced for small producers will be of particular benefit in Wales. It is right to redistribute milk from any producers who go out of business initially to the smaller producers, who are the backbone of the industry in Wales.

THE ARTS

Arts Council

Mr. Dormand: asked the Parliamentary Under-Secretary of State answering in respect of the Arts when he next proposes to meet the chairman of the Arts Council to discuss the council's development strategy document.

The Parliamentary Under-Secretary of State for the Environment (Mr. William Waldegrave): My noble Friend expects to meet the chairman of the Arts Council within the next month to discuss issues of current concern.

Mr. Dormand: Does the hon. Gentleman agree that the slight move towards greater help for the regions is more of a sop than a fundamental change, which is necessary in a development strategy? Is there not, for example, an obvious need for much greater assistance to the arts in an economically deprived area such as the northern region? What is the Minister doing to convince the Arts Council that there is a need for a much greater transfer of emphasis towards helping the arts in the regions rather than concentrating so much on London?

Mr. Waldegrave: I certainly agree with the hon. Gentleman that this is not the end of the story. However, the Arts Council document, for the first time, sets out the beginning of a serious strategy, and it is to be welcomed in that respect. My noble Friend strongly supports that intention, which is made clear in the Arts Council document.

Mr. Higgins: Is my hon. Friend aware that the proposed reallocation of grants will have a serious effect on the Connaught theatre in Worthing? The Arts Council decision seems to have been taken without regard to the recent increasing success of the theatre. Will my hon. Friend ask the chairman to have a word with the secretary, who apparently has set a tight deadline on the submission of any new data that might be relevant?

Mr. Waldegrave: Such decisions must remain with the Arts Council. It is clearly implicit in its strategy that if there is to be money to re-allocate to new functions, some of the existing beneficiaries must lose funds. However, I shall report what my right hon. Friend has said.

Mr. Freud: When the noble Lord next meets the chairman of the Arts Council, what representations will he make to ensure the well-being of the Arnolfini gallery in the Under-Secretary's own constituency?

Mr. Waldegrave: As I have already said to my right hon. Friend the Member for Worthing (Mr. Higgins), these must be matters for the Arts Council. I have no doubt that attention will have been drawn to the position of the Arnolfini gallery by local representatives and others.

Sir David Price: Does my hon. Friend agree that the new strategy of the Arts Council is greatly to be welcomed by the House as a serious effort to create a fairer balance between London and the provinces? Does he also agree that the Arts Council seems at last to have received the message that artistic genius does not lie exclusively in the capital?

Mr. Waldegrave: I know that my noble Friend welcomes the document, not only from that point of view, but because it tackles the even more difficult problem that if there is to be money to spread to new beneficiaries, we must face the difficult question of cutting funds to some of the existing ones.

Mr. D. E. Thomas: When the Minister's noble Friend meets the chairman of the Arts Council of Great Britain, will he urge him to consult the chairman of the Arts Council in Wales so that in any re-allocation of funds in the planning review the Arts Council in Wales can ensure that funding is spread throughout Wales, especially in relation to drama? Will he also ensure that there will be no changes in funding without full consultation with existing claimants?

Mr. Waldegrave: I shall certainly bring the hon. Gentleman's remarks to the attention of the relevant bodies.

Mr. McCrindle: Any move to increase Arts Council grants to areas outside London is welcome, but does my hon. Friend accept that if the result is that certain artistic bodies in London and the home counties find it impossible to continue in existence some of us will be inclined to question whether the strategy is absolutely right at this time?

Mr. Waldegrave: The Arts Council has to make some unenviable decisions, but I cannot see anything inherently wrong in the process of examining certain areas in which incomes are among the highest in Europe to see whether more support could be provided by the local communities so that some assistance can be shifted to other regions.

Mr. Beith: Is the Minister aware that the scheme may threaten groups such as Opera 80 and the National Federation of Music Societies, which have done much to bring professional music to small communities, such as those in Northumberland?

Mr. Waldegrave: As the hon. Gentleman well knows, I shall have to ask him to address his comments to the Arts Council, but I remind him that it is considering funding some new and rather exciting companies in the same type of activity.

Mr. Powley: Is my hon. Friend aware of the concern in Norfolk that the strategy outlined in the Arts Council document could result in counties such as Norfolk, which are somewhat out on a limb, not attracting orchestras and my constituents thus not being able to enjoy the concerts which they deserve to hear?

Mr. Waldegrave: A major recommendation in the document is that more resources should be shifted to my hon. Friend's area. In particular, it is suggested that one of the London orchestras might like to move to an eastern city, which would help to meet my hon. Friend's concern.

Mr. Jim Callaghan: Does the Minister agree with the statement of his right hon. Friend the Prime Minister in her first year of office that there would be no candle-end economies in the arts? If so, how does he square that with the so-called strategy produced by the Arts Council in its booklet, "The Glory of the Garden", which proposes to transfer grants from London to the regions, which will merely rob Peter to pay Paul and set London against the regions and vice versa? Does he agree that the real answer is to give more money to the Arts Council so that it can do its job more efficiently?

Mr. Waldegrave: The Labour party's solution is always to give more money to everyone, because that avoids the need to make any decisions about anything. The chairman of the Arts Council and his colleagues have done something braver, more responsible and more interesting in trying to re-allocate the money made available to them.

Mr. Murphy: Will my hon. Friend ask his noble Friend to emphasise to the chairman of the Arts Council the support of hon. Members from East Anglia for the redistribution of available resources towards that region, which, as I believe everyone would agree, has been to some extent underfunded?

Mr. Waldegrave: I am grateful for my hon. Friend's comments. I know that he has considerable knowledge in these matters. I shall certainly report what he has said.

Burnley

Mr. Pike: asked the Parliamentary Under-Secretary of State answering in respect of the Arts what have been the effects of the achievements listed in the Official Report of 11 May, column 461, on the arts in Burnley.

Mr. Waldegrave: People in Burnley, as elsewhere, have benefited generally from the flourishing state of the arts in this country. The Burnley museum service has received funding through the area museum council, which is supported from central funds as set out in my answer of 11 May.

Mr. Pike: Does the Minister recognise that there is serious concern about the lack of provision for theatre, opera and the like in the sub-regions of this country, and the need to assist projects such as the Mechanics theatre project, on which Burnley council is now embarking at a cost of £1·7 million? Is he aware that the Government's capital and revenue restraints on local government mean that Burnley council will now have severe difficulties with that project and may even incur penalties? Are the Government prepared to assist councils in that position?

Mr. Waldegrave: I agree with the hon. Gentleman's first point, and the whole strategy of the Arts Council is to try to correct that problem. I am aware of the hon. Gentleman's interest in the Mechanics Institute, but decisions on funding must rest with the Arts Council or, in this case, the regional arts association.

London

Mr. Tony Banks: asked the Parliamentary Under-Secretary of State answering in respect of the Arts if he will have discussions with the Greater London Council about the arts in London.

Mr. Waldegrave: My noble Friend has already met representatives of the Greater London council. He is, of course, willing to meet them again if they wish.

Mr. Banks: In that case, will the Minister convey to his noble Friend that one borough that will have responsibility for the GLC's arts activities if the GLC is abolished is Westminster city council? Is the hon. Gentleman aware that that council has recently issued guidelines to arts organisations saying that money will not be available for the arts or activities that involve promoting the cause of CND or describing events in South Africa or Grenada? Does that mean that Westminster will not give a grant to a theatre which put on a play such as "The Trial of Steve Biko", or any play by a Third world playwright? Does the hon. Gentleman agree with Westminster's political diktat?

Mr. Waldegrave: What Westminster city council is saying appears to be rather sensible. It does not warn to give grants from its arts fund for political activities. It is not saying that if a good play meets the criteria on artistic merit it will not be a worthy recipient of support.

Mr. Jessel: Is my hon. Friend aware that in Greater London there is a tremendous amount of fine and splendid art, both visual and live, which uplifts the human spirit and emotions, but that there is also a great deal of decadent rubbish, including ugly architecture approved by the GLC? Is he further aware that many of us hope that when the GLC is abolished there will be more of the former and less of the latter?

Mr. Waldegrave: My hon. Friend tempts me into unbiased comment in support of a recent speech on these matters, which I shall not pass over. My hon. Friend is right, both about the treasures and the formidable achievements of the arts in London, but I agree that there is a need for some pruning in the garden. He is right to say that there is no reason why the arts in London should not remain as strong as they are now, or even gain in strength, after the Government's proposed reform of local government.

Lear Fan Ltd.

Mr. Peter Archer: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 10, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
the intentions of Her Majesty's Government with regard to the future of the Lear Fan project.
You will be aware, Mr. Speaker, of the proposal by Lear Fan Ltd. to produce an exciting carbon fibre aircraft in Antrim. The company has assembled a work force of 380, with a wide range of skills, and it was announced that in due course the project would probably mean employment for 2,800 people. The Government have committed £52 million of public money to the project, and there was general agreement that it was an investment well worth making if they were satisfied that it would produce the required results. Production was due to begin in September.
On 31 May, last Thursday, the chairman of Lear Fan Ltd., Mr. Burch, announced that there were problems with the development programme in Nevada and that, in consequence, there was no prospect of receiving the United States certificate of airworthiness before February of next year. The company is therefore proposing that on 1 July it will lay off the entire work force indefinitely, with the exception of 20 to 30 people, chiefly concerned with maintenance and security. The dismantling of the work force is a serious matter, not only for those who will be relegated to the dole queue but because it has inevitably raised questions about the future of the whole project.
If the matter rested there, the House and the people of Northern Ireland would wish to question the Government

about the steps that they are taking to preserve the prospect of future jobs and the substantial investment of public money. There is, however, another reason for anxiety, because, if he was reported accurately, the chairman seized the opportunity to declare that, public investment or not, and contrary to the understanding of all of us, the company is not committed to producing completed aircraft in Northern Ireland, but only certain components. That raises questions about the commitments obtained by the Government from the company as a condition of advancing substantial sums of money. Presumably the Government did not intend to finance employment in Nevada.
There is no question but that this is a specific matter and that it is extremely important for the people of Northern Ireland. I submit that it should have the Houses's urgent consideration before the company is allowed to proceed further on any unchallenged assumptions and before any decisions that would prejudice the future of the enterprise are taken. The people of Northern Ireland are looking to the House to question the Government on these matters, and that is why I ask leave to move the Adjournment of the House.

Mr. Speaker: The right hon. and learned Gentleman asks leave to move the Adjournment of the House, under Standing Order No. 10, for the purpose of discussing a specific and important matter that he thinks should have urgent consideration, namely,
the intentions of Her Majesty's Government with regard to the future of the Lear Fan project.
I listened to what the right hon. and learned Gentleman said, but I regret that I do not consider the matter appropriate for discussion under Standing Order No. 10 and I cannot, therefore, submit his application to the House.

Prime Minister of South Africa (Visit)

Mr. David Winnick: On a point of order, Mr. Speaker. I know that you are in no way responsible for ministerial statements, or the lack of them, but I should like your guidance on a recent and controversial visit. I shall not dwell on the visit, as this is a point of order, but this is the first time that a South African Prime Minister has visited Britain for 23 years, and many of us deeply deplore it.
The visit has been the subject of much comment outside and I should have thought that the Prime Minister or the Foreign Secretary would take the first opportunity to make a statement to explain what happened and to answer questions. I am aware that there is a written question on the matter on the Order Paper, but what use is that, even to the hon. Member concerned, if one cannot ask a supplementary question?
Is it not an evasion of Prime Ministerial responsibility when such a visit occurs, bearing in mind subsequent events and the comments that were made on both sides of the argument, that right hon. and hon. Members have no opportunity to question the Prime Minister or the Foreign Secretary? I believe that to be deplorable and hope that you will give your guidance on it.

Mr. Speaker: The hon. Gentleman answered his point of order at the beginning, when he said that I was not responsible for ministerial statements or for the answer that might be given later this afternoon. No doubt the matter will arise tomorrow.

Standing Order No. 10 Debates

Mr. Tam Dalyell: On a point of order, Mr. Speaker. As the hon. Member who represents Bathgate, I should like to say that many of us are greatly in your debt for having allowed a Standing Order No. 10 debate on Bathgate, because, as a result, certain things, which I do not wish to go into, have happened which otherwise would not have happened. The debate has affected events.
I know that you do not have to give reasons, but on what criteria do you decide whether to award debates under Standing Order No. 10 on such critical industrial situations? It is legitimate to say that many of us regard three-hour debates on matters such as the Lear Fan project as extremely important, because they can do some good in the outside world.

Mr. Speaker: I am interested in what the hon. Gentleman has said. I did not state the criterion, because I thought that the House would fully understand it. I did not consider that the particular matter should have precedence over the business set down for today or tomorrow.

Postal Services

Sir John Biggs-Davison: On a point of order, Mr. Speaker. I see that the Treasury Bench is well adorned. Can it be that you have received no request from a Minister of the Crown to make a statement on the failure to deliver the mails, with the consequent disruption of State business and the work of Members of the House?

Mr. Speaker: I have received no such request.

EUROPEAN COMMUNITY DOCUMENTS

Ordered,
That European Community Documents Nos. 11753/82 and Addendum 1, 8914/83, 7456/83, 7591/83 and 7937/83, concerning nuclear energy issues in the European Community be referred to a Standing Committee on European Community Documents.
That European Community Documents Nos. 5978/83 and corrigendum, 8931/83 and 10370/83 and corrigendum, concerning Integrated Mediterranean Programmes be referred to a Standing Committee on European Community Documents—[Mr. Garel-Jones.]

STATUTORY INSTRUMENTS, &c.

Ordered
That the Increase of Rent Restriction (Housing Association) (Scotland) Amendment Order 1984 (S.I. 1984, No. 501) be referred to a Standing Committee on Statutory Instruments, &amp;c.
That the Value Added Tax (Special Provisions) (Amendment) (No. 2) Order 1984 (S.I. 1984, No. 736) be referred to a Standing Committee on Statutory Instruments, &amp;c. — [Mr. Garel-Jones.]

Orders of the Day — Co-operative Development Agency and Industrial Development Bill

As amended (in the Standing Committee), considered.

Clause 3

POWER TO DISSOLVE AGENCY

Mr. Alan Williams: I beg to move amendment No. 1, in page 3, line 1, after 'may', insert
`after consultation with the persons as defined by section 1(3) of the 1978 Act,'.

Mr. Speaker: With this it will be convenient to take amendment No. 2, in page 3, line 16, after 'Fund', insert
`provided that some part of those sums be used, in accordance with the wishes of those consulted as defined by section 1(3) of the 1978 Act, for one or a combination of the following purposes: the establishment of a co-operative development fund, a loan guarantee scheme, a national training scheme or to facilitate access by worker co-operatives to general measures of support for small businesses;'.

Mr. Williams: The Minister will recollect that we had considerable discussion in Committee when there was a fair degree of unanimity about the value of the work that the Co-operative Development Agency has been able to do. But he will recollect that there were considerable misgivings amongst Labour Members about the adequacy of resources to enable it to fulfil the welcome wider role that is envisaged as a result of the legislation. The possible consequence of lack of resources, plus wider responsibility, is that the agency could find itself in a non-viable position. That led the Government to build into the legislation a provision that was not in the original legislation enabling them to wind up the CDA. I made it clear that when the Labour Government introduced the original legislation for the CDA we considered whether to include that provision and decided against it because we could not envisage a circumstance in which we would want to disband the CDA.
I know that I must not repeat the lengthy arguments that we had over the first few days in Committee on the pros and cons of the Government's position. The amendments seek to limit the Minister's discretionary power, or at least to ensure that he exercises it after taking into account views that may be contrary to his own. Therefore, the aim of amendment No. 1 is modest but sensible and possibly something the Minister may feel has to be done in any case — to undertake consultation with the co-operative movement more generally, for example, possibly with other people who might be able to provide financial resources, and so on. Certainly he might wish to have wider consultation before making an irrevocable decision to wind up the agency.
Therefore, in the first amendment we are simply asking that the Minister accepts the obligation to carry out such consultation. In the event of the Minister ignoring the advice that I am sure he would get from the co-operative movement and deciding to wind up the agency, we want him to take into account the wishes of the movement in

deciding how to use whatever resources may at that stage remain available to the CDA, which otherwise would have gone into the Consolidated Fund.
The second amendment would make it possible for the Minister to consult the co-operative movement about the possible use of any residual finance, for example in a co-operative development fund. He will recollect our detailed arguments in Committee when we pointed out that while the loan guarantee scheme has been of some relevance to the small, start-up co-operatives, most of the schemes that the Government have brought forward to help small businesses are equity-based. They involve share participation. Since the equity base required in the start-up schemes does not exist in the co-operative form of organisation, it means that co-operatives are precluded from many of the schemes of assistance that Ministers have recognised as being sensible for firms to have available to them in the early days of their existence. We maintain that the abolition of the CDA would not merely put the new co-operatives back on the same basis as would apply to any other small firm, but would leave them substantially worse off in that they would have a more limited range of resources available from the range of measures that the Government have brought in for small businesses.
The need for the development fund is particularly important when one bears in mind that only a short while ago the Minister had to announce a modification of the loan guarantee scheme, which was generally recognised as being one of the successful schemes introduced by Government. Its effectiveness had to be reduced because, while the Government have been willing to boast about the businesses that the scheme has created, they have resented the fact that it has cost them money to operate the scheme. The new loan guarantee scheme that has been introduced is substantially more costly for borrowers. The Minister indicated in comments to the press when he made his announcement that he thought that the number of small businesses using the loan guarantee scheme might fall by as much as 25 per cent. as a result of the change that he announced.
In this situation, the Government could conceivably, against the advice of the co-operative movement, dissolve the CDA. They would thus deprive the movement of support that up to now has been thought to be essential for the new start-up co-operatives, leaving them to a range of small business incentives, most of which are irrelevant to the co-operatives, while the one that is relevant—the loan guarantee scheme — will be substantially more costly than in the past. For all those reasons, we have tabled amendment No. 2.
I realise that the Minister is instinctively opposed to the sort of financial package that is implicit in the amendment. I would accept his rejection of the package, but I ask him at least to consider the genuine case that we have revealed of the inadequate help that is provided for co-operatives by the normal range of small firm schemes introduced by the Government.
We ask the Minister to accept our proposal, which we think is a modest and reasonable one, for consultation before any dissolution. If he is unable to accept the amendment, which I realise may be the case, we ask him at least to recognise the validity of the arguments that we put forward in some detail in Committee, and to give an undertaking that, in the event of any dissolution, the


Government would introduce some scheme tailored more to the needs of co-operatives than are many of the existing small business schemes.

Mr. Dick Douglas: I support the amendments, because I want the Minister to use this opportunity to allay the fears of hon. Members, particularly those who are involved in the co-operative movement, about the Government's intentions for the future of the Co-operative Development Agency.
The effect of amendment No. 1, as my right hon. Friend the Member for Swansea, West (Mr. Williams) explained, would be to make it obligatory on the Secretary of State to consult people in the co-operative movement comprehensively about any winding-up of the agency. The Minister gave an undertaking in Committee that there was no likelihood of the agency being wound up within a period of, say, six years, but that, of course, is subject to any indication by the Treasury of cuts in public expenditure.
A fear exists about what will happen to the agency's assets should it be wound up. The Government are increasing the agency's powers and obligations, without saying that they are willing to subvent the agency further. Additional impositions are being put upon the agency. I refer to national training schemes, to new types of support for small businesses and to the co-operative movements ability to qualify for such support.
I hope that the Minister recognises the concern, both within and outside the co-operative movement. We hope that he will take this opportunity to give assurances about how training overheads will be borne by the CDA. Perhaps the agency will be able to raise sufficient extra funds from outside sources and be in a quasi-commercial position, but there is no guarantee of that. The co-operative movement is still in its embryonic stage. It needs assistance in training and in gathering know-how.
The object of the amendments is to probe the Government's intentions further. The Committee on the Bill probed a great deal, but we have once again to ventilate our fears on the Floor of the House. I hope that the Minister can give an adequate reply and assurances about the future of the CDA.

Mr. David Alton: I am reluctant to support the amendments, not because of the principles to which the right hon. Member for Swansea, West (Mr. Williams) and the hon. Member for Dunfermline, West (Mr. Douglas) aspired, but because I do not believe that they add much to the Bill. We said in Committee that we were worried that the limited life which the Co-operative Development Agency enjoyed since 1978 was being extended for only another relatively short time. We want the agency to be given a permanent place, without a damoclean sword hanging over its head, and without the possibility of its being wound up. We have for a long time been seeking to ensure its permanency.
We were glad when the Government announced a further six years of life for the CDA and said that £200,000 was to be provided. If the amendments were passed, the future of the CDA would be called into question yet again and more uncertainty would be cast over its future.
I understand that the amendments are perhaps a device to have yet another debate on this part of the Bill. We welcome the debate, but I do not think that the amendments add much to the Bill. They will not allay fear

that the CDA might be wound up. If that were to be proposed, we and the official Opposition would oppose the move vigorously. The safeguards for which we look in terms of parliamentary scrutiny and control already exist.
I am unhappy about the possibility of funding currently available to the CDA being redeployed, almost as soft money, without the type of scrutiny which the CDA can bring to bear. I am also worried about the possibility of more Meridens, which would loom large if the amendments were passed. If anything, I do not think that the amendments are ambitious enough or that the Bill sets a sufficiently large target for developing the co-operative sector.
I have long argued that we should develop the co-operative sector to about 10 times what it is at present. I have made the point before that the CDA receives only one tenth of the funding received by agricultural co-operatives, yet farmers constitute only 2·5 per cent. of the work force and are a relatively well-protected sector.
Clearly, there is room for the expansion of co-operatives. One need only look at what co-operatives have achieved in other European countries. In Italy co-operatives constitute about 7 per cent. of economic activity, and 5 per cent. in France, yet in the United Kingdom it is not a measurable statistic. We should set a target of employing at least 1,000 people in co-operatives.
I should also like to see a more ambitious role for the CDA, especially in the further establishment of industrial democracy, rather than just co-operatives. The CDA would have a useful role to play. We debated that in Committee. Clearly, Liberals and Social Democrats, because of our traditional commitment to the sharing of the power of wealth and work, would like to see the CDA used as a tool to achieve that.
The amendments would add little to the Bill. I suspect that they will cause unease among those in the CDA. At this stage, together with hon. Members on both sides of the House, I pay tribute to George Jones and his team in the CDA for their work.
The measure opens the old arguments about the possibility of the CDA being wound up and what would happen to its funds. Let us talk no more about the possibility of winding up the CDA. The Bill gives it a life expectancy of six years. We should agree to give the CDA funding of £200,000. I wish it could be more, but at least the Bill will provide £200,000. We should ensure that the CDA becomes an institution in this country, with more ambitious objectives and, ultimately, a greater role and wider parameters for dealing with other important issues such as industrial democracy. For all those reasons, I am reluctant to support the amendments.

Mr. Ian Wrigglesworth: I shall make a few brief remarks in support of my hon. Friend the Member for Liverpool, Mossley Hill (Mr. Alton) and others who have spoken. I understand that the Government are taking into account the Labour Front Bench amendment and that it may not be necessary to press it to a vote. No doubt the House will welcome that.
I emphasise what my hon. Friend the Member for Mossley Hill says about our commitment to the CDA. We all realise that the development of producer co-operatives in this country has been very slow and small by comparison with consumer co-operatives. When one


draws comparisons with the co-ownership producer sector against that of other countries, one realises how small it is.
There are historical reasons for that, which we all understand. All Opposition Members want to see that imbalance rectified, with the development of more producer co-operatives. There are a variety of ways in which that can take place. The Minister has referred to some of the local co-operative development agencies and their excellent work. I strongly support the excellent job that they are doing in different parts of the country.
I was much involved in putting forward the original proposals that led to the establishment of the Development Agency. When we were doing that in the early 1970s our idea was that it should have a much bigger budget and much greater resources than was the case when it was first introduced. Indeed, the resources were to be greater than those envisaged in the Bill. We welcome increased provision for the agency, but why the Government should have raised the spectre of the agency being wound up is beyond me. It is also beyond most Opposition Members.
We all know that if the Government want to do away with such a quango, they can easily do so, as they have so ably demonstrated, often amidst criticism from Opposition Members. They can easily abolish such agencies, and need come to the House only to put through the necessary legislation if they wish to do so. In our view, there was no need to introduce such provisions or such uncertainty into the future of the organisation.
4 pm
The Government must accept that that very uncertainty impedes the agency's progress and undermines its work. In five years' time, questions will be raised. It will be asked whether the agency is to continue, whether its budget is to be replenished and what its role will be. Organsiations that have come to rely on the agency and that have become used to looking to it for advice and assistance will wonder whether it will still exist. That was never necessary, and we very much regret that such a provision has been included in the Bill. On the face of it, the Bill was introduced to help the agency to do its work.
I hope that the Minister will say that the consultations that the amendment seeks to ensure will be undertaken, and thus that the amendment is unnecessary. We believe, however, that all the provisions for winding up the agency are unnecessary and that is why we do not look favourably upon the amendment.

The Parliamentary Under-Secretary of State for Trade and Industry (Mr. David Trippier): I am anxious to allay the fears expressed by Opposition Members. As I said in Committee, we are proposing to run the agency for six years and it is unlikely that a decision to wind it up will be taken during that period. At the end of the six years the position will be reviewed.
It was always the Government's intention that persons connected with the co-operative movement would be consulted on the agency's future before any decision was reached. The Government are, therefore, sympathetic to the intention behind amendment No. 1. However, in our view the amendment, as drafted, goes too far, since it would require the Secretary of State to undertake statutory

consultations on purely administrative matters such as the transfer of the agency's property, rights or liabilities and the formalities of dissolution.
However, in the spirit of good will that existed in Committee, I am delighted to say that we are certainly prepared, with your permission, Mr. Deputy-Speaker, to move a manuscript amendment provided that the Opposition are prepared to withdraw their amendment. The manuscript amendment requires the Secretary of State to consult persons representing the interests of the co-operative movement before he makes an order terminating the agency's functions. I believe that that meets the Opposition's concern, and I therefore hope that the right hon. Member for Swansea, West (Mr. Williams) will withdraw his amendment at the appropriate stage.
I turn to amendment No. 2. I remind the House that it was our intention that the CDA should move towards self-sufficiency. Having spent a considerable amount of time looking at the CDA, visiting co-operatives and having long discussions with those excellent people, Mr. Ralph Woolf, the chairman of the CDA, and Mr. George Jones, the director—and we are all very anxious to compliment them—I was satisfied that we should continue to fund the agency. That was the whole purpose of putting the legislation in its present form.
The right hon. Member for Swansea, West mentioned the loan guarantee scheme. I listened to him carefully, and he said that the scheme, as currently revised, was substantially more costly. In the spirit of good will that I have tried to generate, I would not wish to argue forcefully with him on that point. However, the net cost of the premium for the loan guarantee scheme has risen from 2·4 per cent. to 3·5 per cent., which is an increase of 1·1 per cent. That is not a substantial rise. The purpose of amending the loan guarantee scheme is to increase the exposure of the banks in the hope that they will improve their appraisal and monitoring procedures.

Mr. Williams: In the spirit of good will that we are both sustaining, I should point out that that increase of 1 per cent. can also be seen as an increase of nearly 50 per cent.

Mr. Trippier: I do not want to be sidetracked on to the loan guarantee scheme, because I could go on at length about it. However, when it was first introduced, the rate of interest—I hesitate to say that it was very high and was, I believe, inherited from the previous Labour Government—still meant that the scheme was extremely attractive. Nevertheless, I do not want to press a party point. The right hon. Gentleman referred to a possible cut of 25 per cent. in the number of applications made, and he correctly quoted from something that I said in a press statement. The percentage was purely a guestimate on my part. But I have also publicly said that the funds made available through the loan guarantee scheme are very much needed.
The hon. Member for Dunfermline, West (Mr. Douglas) was, of course, right to point out that the decision whether to continue funding the agency after six years is subject to Treasury approval, as so many things are. I cannot allay his fears about the future of the CDA any more than I did in Committee. He said that maybe the CDA would attract funds. I think that he was being rather pessimistic and I would certainly be more optimistic than that. I have had two meetings with the CDA since the


Committee last met, and I am encouraged by what Mr. Jones has told me. The CDA not only regards what we have set down for it as something of a challenge, but is also achieving a good deal at present. It may interest the hon. Gentleman to know that I am trying to persuade a rather large co-operative to help the CDA by funding a video or film that will explain what co-operatives do throughout the country. It was also said that the CDA was in its embryonic stage. I would not disagree with that in any way. However, it is precisely because it is at that stage that I decided that we should continue to fund it.
I am afraid that the Government cannot accept amendment No. 2. In the first place, provision has already been made in clause 3(4) to permit any sums received from the winding-up of the agency to be applied by the Secretary of State for purposes corresponding with the functions of the agency. Therefore, there is no need to specify that a part of those sums should be used for training or facilitating access by worker co-operatives to general measures of support for small businesses. When the Bill is enacted those activities will, of course, be consistent with the functions assigned to the agency.
I remember the hon. Members for Liverpool, Mossley Hill (Mr. Alton) and for Stockton, South (Mr. Wrigglesworth) referring to local co-operative agencies, and I am grateful to them both for doing so. In Committee, I also referred to those agencies in favourable terms. I applaud their work. However, I cannot resist saying once again that the assistance being given to the existing co-operatives by the staff of the local CDAs is extremely intensive—although I recognise that very few of those whom they have helped to get off the ground have gone down, which is to their credit. The hon. Member for Mossley Hill may remember that I said, I think at the Committee's first sitting, that I had worked out that one full-time worker in a CDA would be looking after only 32 co-operatives. If the number of small firms counsellors who are contracted to the Department were added to the number of directors of local enterprise agencies, one adviser would be looking after 2,450 small firms, since the total small firms sector numbers 1·3 million. As the Minister with special responsibility for small firms, I am anxious wherever possible to encourage giving what is known as hands-on advice. The co-operatives are doing this, and I welcome it; they are doing extremely well at present.
Amendment No. 2 would also permit some of the proceeds from winding-up to be used for a co-operative development fund or a loan guarantee scheme. That is unacceptable, as providing money for those purposes would go beyond the agency's functions. While we welcome the growth of co-operatives, as I said, we do not believe that they should be in any way subsidised.

Mr. Williams: The Minister is making the very point that perhaps I did not make adequately. He says that it is beyond the agency's functions. When he withdraws the agency's functions by closing it down, then will be the time for it to receive alternative support of the kind that we specify in the amendment.

Mr. Trippier: I thought that I had made it clear in Committee that co-operatives have access to the many schemes that are targeted at the small firms sector, in the way that other small firms do, and that they would not lapse. To provide further schemes using public funds

would, in our opinion, unduly favour co-operatives compared with other types of small businesses. In addition, in the case of the loan guarantee proposal, co-operatives already have, and would continue to have, access to the Government's existing loan guarantee scheme.
The Government do not believe that a decision on the use of moneys arising from the winding up of the agency should be statutorily constrained by the wishes of the co-operative movement. However, we should have regard to any wishes made known to us. I hope that Opposition Members will accept that position and withdraw amendment No. 2 also.

Mr. Deputy Speaker (Mr. Paul Dean): It might be helpful if I tell the House that Mr. Speaker has selected the manuscript amendment to which the Minister referred.. I shall give the Minister an opportunity to move it' when the debate on this amendment is concluded.

Mr. Geoffrey Robinson: We listened with interest to the Minister's remarks. Much has been achieved by the co-operatives, by worker participation and by progress in industrial democracy. My hon. Friends and I take such issues most seriously. The Conservative Back Benches have been entirely vacant for the best part of the discussion. That is more eloquent testimony than anything I could say to the total lack of interest on the part of Government supporters.
I, too, pay tribute to the work of the CDA's chairman, Mr. Ralph Woolf, and director, Mr. George Jones. The Minister explained how impressed he had been during the visits to the agency. The Government have decided to continue to fund the CDA, albeit at a lower level than we should have liked. The Opposition are grateful for any clemency afforded by the Government to any form of quango that remotely purports to represent the interests of labour, and we are grateful, therefore, that the CDA should have a further six years of life envisaged for it, with the funds, at a moderate level, necessary for it to continue.
4.15 pm
At the very time when we are seeing a growth—not an explosive growth; perhaps it is all the better for that — of interest in co-operatives, with workers being interested in playing a role in the survival of their companies, the Government are forcing the CDA not to undertake more work and create more co-operatives, not to invest more widely in the real assets of the co-operative movement, but instead to raise its own funds.
We are grateful for the concessions that have been made, and to which I shall come shortly, but putting much pressure on the agency at this early — as the Minister described it, embryonic—stage in its development will inevitably divert it from the role that it should be pursuing, which is the development of co-operatives. It should not be seeking money to ensure that it can continue to develop. The two things at this stage of the CDA's existence do not easily go together.
My right hon. Friend the Member for Swansea, West (Mr. Williams) pointed out, in relation to amendment No. 2, that in the event of the Government winding up the CDA the funds that would have been invested for co-operative purposes should continue to be used for those purposes. But perhaps now is not the time to look forward to what should be done in the event of the Government deciding to wind it up, and for that reason we shall not vote on amendment No. 2.
We have been struck by the Government's insistence that they must now provide statutorily for the winding up of an organisation which, they say, should continue to exist. My right hon. Friend pointed out that we were sufficiently committed to the CDA when in office to feel that any such statutory provisions were unnecessary. They are bound to give rise to the suspicion that the Government are not as fully committed to the agency as their words might imply.
It was, therefore, disappointing—he may be more forthcoming when he moves the manuscript amendment to which he referred—that the Under-Secretary could not give as clear-cut a commitment as he gave in Committee, when he said that it was unlikely that the agency would be wound up during the next six years. A statement to that effect would place on record as firm a commitment as we are likely to get from the Government. We shall, even so, have the strange position that, even with that degree of sincerity and firmness of intent, the Government feel it necessary to provide for the winding up of the very agency that they are now refunding.
For that reason, the speeches from the Liberal and SDP Benches were strange. It is not in our power to make the Government withdraw the provision; it is part of the Bill. The best that we can do is to secure an assurance that, should they decide to take that step, the interests of those in the CDA and those whom the agency has funded will to some extent be protected. That is why I cannot understand the decision of alliance Members not to support amendment No. 1.

Mr. Alton: We have made it clear that this provision should not have been in the Bill from the start. If it becomes the intention of the Government, in five or six years from now, to wind up the CDA, that, we believe, will be the time to deal with the issue, including the whole question of consultation. That is why we are not in favour of inserting contingency arrangements in the legislation at this stage.

Mr. Robinson: The hon. Gentleman will recall that we opposed the inclusion of the provision throughout our examination of the Bill in Committee and voted several times against various aspects of it. Unfortunately, but inevitably at this stage of the Parliament, we lost those votes. There would be no purpose in voting again on the same issues and losing conclusively again.
It is important to bear in mind that the Government have not entered into any commitment and that the agency is a quango. The Treasury may run short of money and we do not know what may come from that. We shall be grateful if we can have enshrined in legislation the best assurances and consultative procedures that we can obtain from the Minister. The Minister referred to the usual technical deficiencies of the amendment and added that he would be prepared to make arrangements for an amendment to be moved in another place that would meet our substantive argument on the need for consultation. It is against that background that I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Mr. Trippier: I beg to move, as a manuscript amendment, in page 3, line 21, after 'made' insert
`without first consulting the persons required by section 1(3) of the 1978 Act to be consulted for the purposes of that section and'.

The hon. Member for Coventry, North-West (Mr. Robinson) said that there was a lower level of funding than the agency would like. That is the fact, but the funding, which is substantial by any standards, is at a much higher level, at £200,000, than the £75,000 that is being paid to Business in the Community. That is the argument that I advanced in Committee. Both sides of the House should draw comfort from the fact that we have given six years of stability to the agency, which is a longer period than any it has enjoyed in the past, and I gather that it welcomes it.
Perhaps the hon. Member for Coventry, North-West did not hear me say that it is unlikely that a decision to wind up the agency will be taken during the six years. He now asks me to say that it is most unlikely that that will be done. The hon. Gentleman will have noted that I am in an amenable frame of mind, and accordingly I am anxious to acquiesce to his request.

Amendment agreed to.

Clause 4

DESIGNATION OF ASSISTED AREAS

Mr. Bruce Milan: I beg to move amendment No. 3, in page 3, line, 26, at beginning insert '(1)'.

Mr. Deputy Speaker: With this it will be convenient to take the following amendments:

No. 4, in page 4, line 7, at end add—
`(2) In section 1 of the Industrial Development Act 1982 for subsection (7) there shall be substituted the following subsection:
(7) An order under this section shall be made by statutory instrument and shall not be made unless a draft of it has been approved by resolution of each House of Parliament.".'.

No. 5, in clause 5, page 4, line 18, after 'paragraph', insert `(a)'.

No. 6, in page 4, line 20, leave out from 'of to end of line 21 and insert
`subsection (7) of that section'.

No. 53, in clause 7, page 5, line 10, after 'instrument', insert
`such day not being earlier than one year after the date of the statutory instrument'.

No. 47, in schedule 1, page 13, line 14, leave out from beginning to 'the' in line 19.

Mr. Millan: Amendment No. 3 is a paving amendment for the other more substantive amendments, especially Nos. 4, 5, 6 and 47, which deal with the statutory instrument procedure. I act as the parliamentary adviser to the Institute of Chartered Accountants of Scotland, which has expressed serious reservations and criticisms about the Bill and the White Paper. Some of the amendments reflect the views that it has expressed.
The purpose of the amendments is to substitute the positive procedure for statutory instruments for the negative procedure that is contained in various parts of the Bill. This is a familiar argument, and every Opposition try to change every example of the negative procedure into the positive procedure. However, there is a substantial case for doing so in this instance. The Bill is very much a framework of provisions, and the way in which regional aid develops over the next few years will be significantly affected by the orders that are produced by Ministers.
One of the purposes of the Bill is to reduce spending on regional aid by about £150 million to £200 million a


year. We reckon that Scotland may lose about £70 million-worth of regional aid a year. Those of my hon. Friends who represent other parts of the United Kingdom are aware that the areas which they represent will suffer similar reductions. If the Government's policy is implemented to the extent that I have mentioned, it will have disastrous consequences for many development areas.
Much of the proposed saving will be achieved by parliamentary order and we shall not have a proper opportunity to debate the Government's proposals. We all know that the opportunities for debate are extremely limited when an order is laid. I strongly object—I think that my right hon. and hon. Friends share my objection—to the negative procedure being adopted in various parts of the Bill. I base my objection on the framework of the Bill and the fact that the Bill was introduced before the final consultation period on the White Paper had expired. There are other arguments which I could deploy, but I do not wish to do so while moving the amendment. We can take up some of the arguments when we discuss subsequent amendments.
Given the unsatisfactory framework of the Bill, I wish to introduce the maximum protection that is possible for development areas when subsequent Government actions take place. Amendment No. 4 substitutes the positive procedure for the negative procedure, which is provided for by section 1(7) of the Industrial Development Act 1982. That subsection allows changes in development areas to be made by statutory instrument, subject to the negative procedure. One of the ways in which the proposed massive saving will be made is by removing development area status from certain areas which now enjoy it. That can be done by means of an instrument which is subject to the negative procedure.
There is considerable apprehension in many areas of Scotland — I imagine that the same is true in development areas in England and Wales — that development area status will be removed from them. In July 1979, shortly after the Government took office, there was a significant reduction in development area status and many areas had aid status removed from them completely, while others had their status reduced to that of an intermediate area. That can be done by an announcement in the House and the use of the statutory instrument procedure, which means that we are not even guaranteed a debate.
The entire framework of the Bill is highly unsatisfactory, but we can improve matters slightly if we adopt the positive procedure in place of the negative procedure provided for by the 1982 Act.
Amendments Nos. 5, 6 and 7 have a similar objective in a slightly different context. Schedule 1, which is extremely complicated, is a rewrite of part II of the 1982 Act. The element of discretion that will be given to Ministers under the new scheme is frightening. Virtually everything will be within their determination by means of orders laid by the Secretary of State. The power which the schedule will give to Ministers is frightening.
Some of the measures which can be made, and which can have serious consequences for activities in particular areas, are subject to change at the whim of Ministers by means of a statutory instrument. To be fair, some of the statutory instruments will be subject to the positive procedure. If, for example, Ministers change the prescribed percentage of grant payable on capital

expenditure, that measure will, I understand, be subject to the positive procedure. The same is true for the prescribed amount payable for jobs.
We must also consider changing the activities which will qualify for help under the schedule, which are subject only to the negative procedure. The major matter of qualifying activities has aroused a tremendous amount of interest. There is no reason why service industries as distinct from manufacturing industries should be dealt with by statutory instrument, subject only to the negative procedure. Amendments Nos. 5, 6 and 47 would bring any changes in the qualifying activity into the positive procedure of the House. That means that the Government would need to produce draft orders, which would be subject to approval by the House.
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In view of the anxiety about the development 'areas and also about many other regions which hope to be development areas, I hope that the Government will accept these changes.
Amendment No. 53, which stands in the name of my right hon. Friend the Member for Swansea, West (Mr. Williams) and others, has been grouped with amendment No. 3. I strongly agree with the purpose of amendment No. 53, which would write into the Bill a provision for a year's delay before any major change that is made by statutory instrument is implemented. It is a valuable amendment, and I hope that the House will accept it.

Mr. Williams: I endorse entirely the point made by my right hon. Friend the Member for Glasgow, Govan (Mr. Millan). This legislation will enable Ministers to implement changes that cart condemn some areas of the country to continuous rundown. Such changes will all be made under an order procedure. What is more, some parts of the legislation will be implemented without any guarantee that the House will have the minimal hour and a half debate that occurs with an affirmative resolution procedure. I am delighted that my right hon. Friend moved the amendment. We dealt with the matter in Committee. We intend to vote for amendments Nos. 4 and 53. These measures are of concern to some of my hon. Friends who have constituency problems. The debate on amendment No. 53 provides them with an opportunity to point in detail to the need for proper consultation after the Government have reached their decision.
We are at the stage at which the Government have undertaken their consultative process, have completed their consultations, and are deliberating on the basis of those consultations. Even under the affirmative procedure, the changes in the map, which are likely to be substantial, can in no way be properly considered in a mere hour and a half.
It is four years since the last change in the assisted area map, when we were promised that Ministers would take into account any modifications that occurred in the period after the initial proposals were put forward. On behalf of west Glamorgan — my part of south Wales — I took deputations to see the then Secretary of State. I was assured that, if any adverse changes occurred, he would reconsider the downgrading of west Glamorgan. I know that numerous hon. Members had the same experience. Yet, as closure followed closure, as hundreds of redundancies followed hundreds of redundancies and as one piece of bad news followed another, there was no reconsideration. Four years later we are at last seeing the


possibility of change, but, because of the nature of the Government's objective in introducing the Bill, none of us looks to the changes that are likely to be implemented with any enthusiasm or hope.
We recognise that it is probable that there will be massive descheduling or downgrading into intermediate area status, if that status survives. The Minister made the point in Committee that there was no guarantee that intermediate area status will continue. I hope that the Government intend to sustain that status, although not if it is intended to be a slot into which the Government put everything simply because it costs next to nothing as a result of being excluded from the regional development grant system.
We could, in the autumn, be faced with changes in the map affecting between 100 and 200 hon. Members and their constituents. We may be offered, at best, one and a half hours to debate the changes, of which half an hour must be taken up by the Minister, effectively leaving one hour for other hon. Members. That means less than one minute per hon. Member to make representations against the changes affecting constituencies. That is nonsensical and unacceptable.
Hints have been made about certain changes. There is a possibility of scheduling the west midlands. We do not as yet know whether that will happen. I accept that Ministers probably do not know either, because they are still assessing the results of the consultation. That decision alone, the inclusions, exclusions and appropriate gradings, would merit more than a one and a half hour debate—before a debate on what is happening elsewhere in the country.

Mr. Geoffrey Lofthouse: Merseyside.

Mr. Williams: There are deep-seated problems in some areas including, as my hon. Friend said, on Merseyside and in the north, in Scotland and in Wales. Each of those areas has a substantial case to put forward. We shall have a debate of only one and a half hours in which to consider the effect of the Minister's consideration under the consultative procedures. That is utterly inadequate. We want assurances about the type of debating time to be made available to the House.
What would happen if the Minister decided to abandon intermediate area status? What would happen if intermediate area status were to become the dustbin into which the Government dumped nearly everything to avoid significant costs? We want an opportunity to discuss those matters in detail, as well as the rate of regional grant, qualifing activities and the level of job grant. Those technical aspects on their own merit a full day's debate before we discuss the map, which is probably a paramount matter in the minds of my hon. Friends who hope to participate in the debate today. We are assured only of a one and a half hour debate. We want a time lapse between the Goverment's announcement of their decision on the new map and its implementation. That is what amendment No. 53 is about and the matter on which we intend to vote. Hon. Members representing many of the areas that may be affected by downgrading or inadequate grading will want to visit the Department to have discussions before the decision is implemented and before the damage is done.
For those reasons, I urge my hon. Friends to support amendment No. 53. I have no doubt that many of my hon. Friends will take the opportunity to talk about the problems in their areas, which would be exacerbated if an incorrect decision were taken about the map.

Several Hon. Members: rose——

Mr. Deputy Speaker: Order. It might help the House if I say that amendment No. 53 is being discussed with the other amendments. I understand that the right hon. Member for Glasgow, Govan (Mr. Millan) wishes to have a separate vote on amendment No. 53. He will be able to do that later when we reach that stage, when I shall ask him to move the amendment formally.

Mr. Lofthouse: I am grateful to have the opportunity to support amendment No. 53. I believe that it is essential to have a time lapse of about 12 months, as provided for in the amendment, to give the Government time to consider changes to the map, not just for those areas which retain their assisted area status, but for the ever-increasing number of areas where new industrial development is not keeping pace with job losses in their traditional industries.
The evidence shows that the disparity between employment in the south-east and in the development areas continues to increase. For similar reasons the differences in other areas, many of which were recognised as intermediate areas in 1981, continue to increase. In those areas the traditionaal industries continue to lose employment at a rate which was not envisaged when they were intermediate areas. They are now showing all the characteristics of economic decline, with its associated problems. There is a loss of the younger, more mobile population and a gradual rundown of the infrastructure and services. The five-towns area which covers the whole of my constituency and parts of the constituencies of my hon. Friends the Members for Normantion (Mr. O'Brien) and for Hemsworth (Mr. Woodall) has had a population loss of 2·6 per cent. over the 10 years 1971 to 1981. In Featherstone and Castleford it is 8 per cent. and 5·4 per cent. respectively.
It is believed that the bulk of that loss is the result of net migration. There was a small migrational movement between 1961 and 1971, despite a large inflow of miners and their families to Knottingley to mine the Kellingley mine, but the outward movement has increased over the past 10 years. Those problems were seen at the time of the Hunt committee, and regional policy at that time attempted to arrest that process in the early stages. Recently, national policies have accelerated the loss of employment from the older industries and removed the only tools which many areas had available to encourage compensating employment.
4.45 pm
In a recent submission to the Secretary of State for the Environment the Wakefield metropolitan district council showed that a large local authority, such as Wakefield, with a wide range of environmental, economic and social conditions within its boundaries, can contain substantial declining urban areas. They are problems which remain hidden when crude analyses are made. The district council claims, and I support its view, that such an area exists within Wakefield and is known as the five-towns area. It comprises the towns of Castleford, Normanton, Featherstone, Pontefract and Knottingley. In total the area


has a population of almost 116,000. The report illustrates the problems the area bears and which, for a number of reasons, are often overlooked.
National analyses of deprivation are usually based upon statistics relating to complete local authorities. Such statistics were used by the Department of the Environment as background to the announcement by the Secretary of State that 11 new authorities were to be given status under the Inner Urban Areas Act 1978. The five towns form a self-contained area—a complete employment travel-to-work-area — of 116,000 people whose problems are masked by the remainder of the district. The statistics for the five towns compare favourably with those of local authorities recently given inner area status. One of those authorities is, in fact, smaller than the five towns.
My constituency lost its intermediate area status in 1981, when unemployment was just above the national average. It has since fought a losing battle against redundancies and closures in the mining, glass and chemical industries. Last year saw 1,000 jobs lost in the glass industry alone. The future continues to look bleak, with the recent decision to close Glasshoughton colliery and the expected reduction of manpower of about 400 jobs from further colliery reorganisations.
Those are the job losses already identified, but the future of the collieries in the constituency is at present unknown. The Selby coalfield will come on to full production in the near future and will mine 10 million tonnes of coal a year with a work force of 4,000. It will probably replace some of the production in the north Yorkshire area of the National Coal Board. It is possible that there will be many more redundancies. The present male unemployment rate is 15 per cent. That is rising and will increase rapidly.
Economic circumstances demand that a wider coverage of assisted areas be created. There should be at least one wide category, which would create eligibility for European regional development funds. The loss of access to those funds in 1981 was a blow to many areas.
In addition, there must be wider criteria for the selection of assisted areas, with greater emphasis on industrial and socio-economic structure and youth employment. All factors which assist in identifying areas of impending decline should be considered. It is not sufficient to wait until redundancies raise unemployment to unacceptable levels before action is taken. The Government must not be fooled by conditions in the southeast. They must realise that in most regions which are dependent upon traditional industries conditions will worsen before they improve. If regional policy is insensitive to what is happening in those areas, the spiral of decline may be unstoppable.
My constituency is one of the areas which I have just described. The assisted areas map excludes many areas where the problems are so serious that action is necessary. I should place the Castleford travel-to-work area within that category.
If decline is to be tackled at the outset, it is necessary to extend the assisted area levels to at least those which existed before the last changes. The Government should accept amendment No. 53 and allow the 12-month breathing space to cover circumstances which they probably cannot now envisage, because it would appear at least possible that many of the mining communities will be wiped out, with all the consequential job losses.
The Government have an obligation to channel work into such areas and give them the status required to do so. If the Government accept the amendment there will be some hope for those areas which otherwise will become industrial deserts.

Mr. Wrigglesworth: I support the amendments moved by the right hon. Member for Glasgow, Govan (Mr. Millan), who put a powerful case for introducing the positive procedure for such changes. I want also to add a few comments to the arguments in favour of the amendments.
None of those hon. Members who represent areas such as the north, Scotland, Wales, the north-west and other areas that have experienced the dreadful industrial decline of recent years will be unaware of the close interest taken by the House in these vital matters. Ministers of the Department which is at the receiving end of representations will also be aware of the views that are held. There must be some way of rating Government Departments according to the number of deputations that they receive and I would be surprised if the Department of the Environment and the Minister responsible for regional development were not high in the list for representations on these matters. In perhaps 90 per cent. of cases, local Members of Parliament will be involved.
Not only in the areas hardest hit by the recession but in the whole country unemployment, factory closures and the movement of new firms into constituencies are the meat of the work that Members of Parliament do. It is, therefore, surely right that when any changes are made in the level of grant or in the areas covered by the mar) of regional development aid, hon. Members should have an opportunity to debate the changes so that their input and the views of their constituents can be taken into account.
Hardly anything generates more anger and despair in our constituencies than the question of industrial development. The standing of hon. Members, and Parliament itself, will be considerably undermined if constituents are unable to see their Members adequately representing their views here when fundamental changes take place. Hon. Members understand the industries in their own constituencies and areas. They understand the implications for their constituents of the high levels of unemployment, the closures and the lack of growth of recent times. They, more than anyone else, can represent the feelings, views and interests of their constituents when such matters are under discussion.
I strongly support the amendments, both as a northerner and as the representative of a northern constituency, but I have another reason for supporting them. The alliance believes that there is a powerful case for a redistribution of resources from the better-off regions to the less well-off. We believe that that should be done openly and with full debate and discussion. It should not be done by sleight of hand. People should understand what is taking place, and that it is being done for the right reasons. I believe that people in the better-off regions genuinely wish aid and support to go to the areas ravaged by industrial dereliction in recent years. I believe that those in the relatively better off regions will support the case for helping new industries in towns that have been devastated in recent times. No one who has seen the closures in the northern region or the devastation in towns such as Liverpool could be uncaring about the consequences of such closures. In towns such as Consett and Hartlepool one can see the social and


industrial devastation caused by the major closures of recent years, and it is right that resources should be redistributed to help such areas get back on to their feet and to help them at least to maintain the relative position that they enjoyed in times past. They should not be allowed constantly to fall behind the growth in other parts of the country.
For those reasons, I hope that the House will support the amendments and will ensure that we have a full opportunity to debate changes that will fundamentally affect not only the industrial prospects but the whole social fabric of the regions. Those are matters upon which hon. Members have deep feelings and clear views, which they should be allowed to express.

Mr. Tam Dalyell: When parliamentary colleagues of all parties have taken great trouble over, and spent much time on, the Committee stage of a Bill, I am in principle hesitant about other Members muscling in at a later stage, on the Floor of the House, for one purpose or another. That is the position that I am in, but my right hon. Friend the Member for Swansea, West (Mr. Williams) said that amendment No. 53 provided an opportunity for hon. Members to raise constituency problems, and I therefore ask hon. Members to forgive me for intervening. I shall be succinct.
The Minister will recall how courteously he treated my hon. Friend the Member for Livingston (Mr. Cook) and myself in relation to British Leyland, when we saw him at Victoria street. The Bathgate situation demonstrates why we should use the positive procedure rather than the negative procedure, or the hammer of debate, under Standing Order No. 10.
Partly because of the debate on Bathgate, the situation has changed somewhat in the past 10 days. There is a serious bidder—that is my opinion, and I have seen him for three and a quarter hours—for part at any rate of the biggest concentration of machine tools under a single roof in Europe. I do not mention this at the bidder's wish. I believe that he would have wished to keep the matter under wraps until after Thursday's meeting. However, for one reason or another, the decision of Mr. Charles Nickerson of Track Marshall to take an interest in that concentration of machine tools has become public.
I think that it is legitimate gently to ask the Department of Trade and Industry a question. Is it prepared to give all possible support to the Scottish Office, the Secretary of State himself, Dr. Gavin McCrone and others who—together with West Lothian district council, Lothian regional council, the trade unions and, I believe, the Scottish CBI—are trying to put together a constructive package?
This is a grey area. I suspect that, like me, officials have no clear idea of what powers exist when there is a willing seller, when that willing seller has certain obligations under the redundancy payments legislation and has already offered enhanced redundancy payments, and when a possible buyer may encounter problems in taking on the debt obligations involved in the enhanced redundancy payments.
I put it to the Department, as seriously and gently as I can, that in a situation in which the rules are less than clear we should at least be able to count on its good will and best endeavours within the law to help out so that a constructive

package does not come to grief through being bound up with red tape and difficulties in interpreting the regulations.
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Any transition period is bound to be difficult, and if Charles Nickerson is to become involved he wants to do so fairly soon for the sake of morale and to prevent from arising problems associated with a wind-down in a great industrial undertaking. I do not believe that he is anyone's creature or stalking horse. I believe that a perfectly genuine interest has been shown by this young firm, which has had great success in Lincolnshire and is involved in the Bathgate operation as a customer. I hope, therefore, that all possible help will be provided.
I rather favour letting bygones be bygones, but I was somewhat distressed at the style of the Secretary of State's announcement. I thought that he went over the top. Nevertheless, we should put that behind us. I mentioned it only because it received such wide coverage in the Scottish press. Even the Sunday Post, which is scarcely a Labour newspaper, commented on the lack of good will on the part of the Secretary of State in making the announcement.
Normally, it would be superfluous to ask for the good will of the Department of Trade and Industry, but in a complex situation involving so many jobs, both directly and through the knock-on effect, I wish to check that there is the maximum good will from the Secretary of State and the Department. Some of us feel that we have done our bit in that, whatever our doctrinal reservations about taking over a publicly owned industry, and, despite criticism from some of our political friends in the trade unions and elsewhere, we have made it clear that we are prepared to back the Nickerson bid as a possible means of saving an extremely important part of British industry and doing something to hold back the deindustrialisation of Britain.
The Minister knows the background. I seek from him the assurance that in every possible way the new circumstances will be given a fair wind, not just by the Scottish Office, which has already promised it, but by the Department of Trade and Industry. Inevitably, in circumstances of this kind, every Member of Parliament will plead for his own. Nevertheless, I believe that there is now an overwhelming case for granting the special development status requested by both the Conservative-controlled Lothian regional council and the Labour-controlled West Lothian district council.

Mr. Don Dixon: I support amendment No. 53, which provides for a delay of 12 months before any alteration in the map, because any alteration will not be to extend regional support but to redistribute a smaller cake. The hon. Member for Stockton, South (Mr. Wrigglesworth) referred to the constant need for constituency Members to lead deputations to Ministers as a result of closures. Most of our constituency time is now taken up with such matters.
The north of England has a branch plant economy in that decisions about the future of 80 per cent. of the manufacturing industry in the area are taken elsewhere. The amendment would impose a delay if the Minister sought to alter the map and to deprive certain areas of development area status. Like the White Paper on regional development and the legislation of 1979, the Bill is merely a disguise for a cut in regional development grant.
My area of the northern region has the highest rate of unemployment on the mainland of Great Britain and the northern region has one of the highest unemployment rates in the EEC. In 1980, more than 90 EEC regions had lower unemployment rates and only 10 had higher unemployment rates. One sixth of the working population in the northern region is now on the dole—I am talking not about percentages, but about human beings with families to keep—and four out of 10 of them have been out of work for more than 12 months. That is one of the reasons why constituency Members get so emotional when new closures are announced. Women in my area are especially hard hit, many of them not even bothering to sign the register, and the number of young people out of work for more than 12 months increased by more than two thirds between October 1981 and October 1982. Nearly 60 per cent. of the unemployed in the northern region are unskilled or semi-skilled.
That is why we support the 12-month delay proposed in amendment No. 53 so that Members representing areas of that kind can make representations to Ministers on behalf of their constituents before any alteration in the map. It is a sensible amendment and there is no reason why the Minister should not accept it.

Mr. Gerald Bermingham: My hon. Friend the Member for Glasgow, Govan (Mr. Millan) referred to Merseyside. I mention it loudly and clearly because my constituency is a Merseyside constituency. Listening to my hon. Friend the Member for Pontefract and Castleford (Mr. Lofthouse), it occurred to me that his constituency and mine were almost identical, divided only by the Pennines, as both had a high content of coal and glass as traditional industries. About a third of the shrinking Lancashire coalfield is in my constituency and at one time the area contained the heart of the glass industry, although about 10,000 jobs have been lost in that sector since the late 1970s.
If amendment No. 53 is accepted, authorities such as the St. Helens metropolitan district council and the Merseyside county council — if, as we all hope, the latter continues in existence — will have more time to add to the detailed representations already made to the Government. I am sure that the Minister, like me, has received the lengthy and detailed documentation submitted by the county council setting out the complex problems of Merseyside, as well as the equally detailed submissions from St. Helens district council describing the problems and difficulties of the borough. Those representations need to be considered in detail, which is why I support amendment No 53. It will give time for us to support, and add to, the representations as and when the new map is published.
I accept that revisions to the map were needed. My metropolitan borough contains both special development and development status areas. However, there are also areas with no status, such as the Newton-le-Willows area, which lies in the constituency of my hon. Friend the Member for St. Helens, North (Mr. Evans). Because they have no status, they have high unemployment. According to figures that I have just received from the district council, 19·6 per cent. of the active male population in my area is unemployed. That shows the problems that we face.
The only decent part of clause 4 is that which allows the map to pick out wards for special treatment. That is good because certain areas in the north-west have

unemployment rates as high as 60, 70 and 80 per cent. However, those areas may lie within a large conurbation with an overall rate that is not so high. Aid needs to he brought to the pockets of high unemployment because once the rate rises above 20 per cent. it becomes intolerable. Indeed, at 18, 16 or 10 per cent. unemployment is still intolerable, but when it goes above 20 per cent. it is a national disgrace. In my constituency there are areas and streets where those going to work are the exception rather than the generality.
The north-west has ancient industries that are either changing through modern technology or are closing—often because of Government policy. That is happening in the coal industry now, as it has already happened in the steel-related products industry—there are no steelworks as such. St. Helens has seen the loss of its chemical industry and the glass industry has been shattered by Government policy. I make no apologies for so describing it. My hon. Friend the Member for Pontefract and Castleford has also experienced the problems of the glass industry in his area because of the lack of any sensible energy conservation policy.
I have said on many occasions that it is quite ridiculous that we are encouraged to conserve energy, while the Budget then takes away the VAT advantages for energy conservation products. However, this afternoon is not the time to go down that avenue, other than to say that it creates unemployment in regions that already have grave unemployment.
If the clause remains as drafted there will be no time to debate the alterations to the map. There will be no opportunity for hon. Members to vote on the changes to be made. We shall not have the opportunity to discuss the damning effects of the alterations on the northern areas, and especially on Merseyside and St. Helens. Those areas need considerable help if they are to have the advantages of reinvestment and redevelopment that are currently being enjoyed by the south-east.
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Unemployment rates in the south-east are much lower than in the north-west. I would gladly swap my unemployment rate for that of the south-east tomorrow. My constituents would be absolutely delighted if my area had unemployment rates of 8, 9 or 10 per cent. rather than 19·6 per cent.
St. Helens originally held special development area status, but on 1 August 1980 it was reduced to development area status. What has happened since then? It is a simple and sorry tale. St. Helens has lost more and more factories, firms and jobs and has steadily gone downhill. I unreservedly support what the local authority has been doing to attract employment, but by whatever means it uses it can in no way match the general economic pattern that has destroyed jobs. That is the background against which we must live and operate.
Part II of the Bill will take between £150 million and £200 million out of the development economy. That may not be a large amount in the overall budget figure, but those who have to live and work in areas of high unemployment, in aging industries and with continual job losses, will be badly affected. Our youngsters are conditioned to the dole queue before they leave school. The chance of a youth leaving school this summer finding a job is as low as one in 20. The withdrawal of £150 million to £200 million means the difference between


some hope and no hope at all. The Bill contains the seedcorn of the new map. It will lay the pattern that will affect the industrial areas. That is why so many Opposition Members feel strongly about the Bill.
I think that we all agree that some tidying up was necessary — but it should be done against a forward-looking not a backward-looking policy. It is backward-looking to reduce the employment opportunities in the industrial areas of the north, the north-west and the north-east; yet that is what the Bill does. I hope that, even at this late hour, the Government will accept the amendments. They must do so if we are to give hope to the youths who will be leaving school this summer. We must show them that we are prepared to go out and attract industry. The only way to do that is by giving special development area status to encourage industry to move to those areas.
Clause 4 will remove yet another vestige of hope for the future. I urge the Government to think again and to accept the amendments. When the Government have finally prepared and produced the map, they should have the courage to give us the time to make representations. When those representations have been made, they should have the courage to debate the issue on the Floor of the House. They should listen to what hon. Members on both sides of the Chamber have to say about a plan which, at the end of the day, will take away even that small glimmer of hope that is all that we have left. If they do not, the Government will condemn many more youngsters, middle-aged people and women to a life without the opportunity for work. I ask the Government to give us back our £150 million to £200 million and reverse their policy. If they do, I shall be a very happy man.

Mr. Michael Fallon: I rise to speak, partly because I should not want my hon. Friend the Minister to think that silence on the Conservative Benches shows a weakening of support for the Bill, and partly because I can see one powerful reason why amendment No. 53 might not be acceptable to the Government and should not be acceptable to the House. The reason was alluded to in Committee—it is the considerable delay and uncertainty which would result if the amendment were accepted.
Several matters remain to be decided after the Bill is on the statute book, through the various statutory instruments for which it provides. Among those matters are the cost-per-job limit and the number and range of service industries that will be qualifying activities. It is wrong to ask the House to take decisions on some of those matters and then to allow at least one year of delay and uncertainty on the major matter—the scope of the map—which worries Opposition Members. Any study of the academic literature on the effects and inducements of regional policy reveals that an industrialist wants to know whether a grant or incentive is certain and predictable. Such delay would extend uncertainty and, with regard to overseas investment, might leave Britain and the regions which we hope to assist at a disadvantage compared with our principal European competitors.

Mr. Alton: We began the debate on this group of amendments at 4.23 pm. That shows how much time it has taken, even though there are relatively few hon. Members here. If the proposed changes are made, I am sure that many more hon. Members will argue their constituencies'

cause. It is understandable that they would want to ensure that their areas were not neglected and subjected to further reductions in funding, whether through regional development grant assisted area status or industrial development grant. It is inevitable, therefore, that 90 minutes will prove too short a time for us to debate these important issues. That is my principal reason for supporting the official Opposition on this group of amendments.
In Committee the alliance accepted the need to reexamine the role of regional development grants and to reconsider assisted areas. We accept that regional development grant should be aimed more closely at providing jobs. That is why I supported the Government's suggestion of getting down to local government wards. There can be enormous discrepancies in the level of unemployment within one parliamentary constituency. Unemployment in one ward in nine is well over 50 per cent., whereas unemployment in another ward at the other end of the constituency is estimated to be less than 10 per cent. That is in a city in which 92,000 people, or one-fifth of the population, are out of' work. If the disparities are so great in one constituency, the disparities between the south-east of England and parts of Merseyside are even greater. It is no coincidence that the 100 constituencies with the highest unemployment are in northern England, the north-west, parts of Wales and Scotland and that the 100 constituencies with the lowest unemployment are almost entirely in the south-east and are almost exclusively represented by Conservative Members. That is one of the symptoms of divided Britain which regional development grant should attempt to rectify.
The 90-minute knockabout which the House will have when new regulations or orders are issued will not satisfy the anger which many right hon. and hon. Members will feel. The Minister must accept that many of us are deeply suspicious about the motives of part II. Although I supported the Bill as regards the Development Agency, the money that is being provided and some of the Government's rationalisation, I must point out that there is a deep-rooted suspicion that part II is a cut dressed up as a rationalisation, as £200 million is likely to disappear. The Dutch auction that we are likely to experience later in the year is highly undesirable. Therefore, if the Minister can do nothing else today, I hope that he will assure us that when proposals for the assisted area map are presented there will be a full debate rather than a 90-minute knockabout. I hope that the Minister will do all that is within his power to ensure, through the usual channels, that right hon. and hon. Members are given an opportunity to express their constituents' views.
Many of us feel that it is insulting and gratuitous to our constituents to be told that 90 minutes is all that will be provided when the patronage of the pork barrel is used to determine which areas will receive reduced regional development grant. It is not good enough that some hon. Member will be told after the 90-minutes knockabout that their areas have been excluded. There is a lingering suspicion that allocation of regional grant has more to do with political considerations that with the needs of the communities to which they are awarded. In local government, and since becoming a Member of Parliament, I have witnessed rate support grant being used, especially in shire counties, to benefit areas which do not need the funding, and metropolitan districts which need them far more being excluded purely because of their political control.

The Minister of State, Department of Trade and Industry (Mr. Norman Lamont): Would the hon. Gentleman care to tell us which assisted areas he thinks have been given such status unnecessarily and ought now to have it taken away?

Mr. Alton: I did not say that areas had been given grant unnecessarily, but that areas which should be given it have not. I am sure the Minister agrees that parts of the midlands which are now suffering the deindustrialisation which Merseyside has suffered for the last 20 years are not covered, as are parts of my constituency. Rather than a contraction of regional development grant, right hon and hon. Members on both sides of the House want an extension.

Mr. Kenneth Hind: If the hon. Gentleman considers the map of assisted areas carefully, he will find that the suggestion that the Government have favoured Conservative-controlled areas scurrilous and without basis.

Mr. Alton: The hon. Gentleman will be as aware as I am that there are areas within the north-west of England which have clearly benefited from public funds being pumped into them, whereas other areas have been neglected and public funds have not been made available to them. To take the opposite argument, areas in the north-west have been included in the past which should not be included in the future. I should be prepared to look at the map of our region with the hon. Gentleman, to study the way in which the grants have been given and to look objectively at how we can readjust that map to take into account the rundown of the high stack industries and the need to encourage high technology industries. In Committee I gave some examples of how public money had been wasted in the past and how we should redeploy resources in the future.
We should also take into account the performance of private enterprise within a region before determining how we complement the funds being provided by private enterprise with those from the public sector. One has only to look at the city of Liverpool to see how firms have discriminated on a purely regional basis. Firms such as Tate and Lyle and United Biscuits, when faced with deciding which factory to close, have invariably chosen one in an area of high unemployment. That is the kind of occasion on which Governments should intervene. They should not just let free market forces reign and the pressures of the market place apply. Governments should intervene and say that they are prepared to provide additional resources as an incentive to keep companies in areas where there is massive unemployment.
United Biscuits is in an area where 16,000 people are registered as unemployed at the local Old Swan unemployment office. They have no hope of obtaining alternative employment and will shortly be joined by 2,000 people who are presently employed by United Biscuits. The job prospects for those 2,000 will be negligible. They will have little chance of obtaining alternative work. Yet here is a company which is relatively successful. This year it has made a profit of £80 million. This particular factory has never had a strike and has existed since the turn of the century. Productivity is as good as anywhere else, yet the company has decided to

close down this one of its five factories in an area where unemployment is raging at 45 per cent. That is socially utterly irresponsible and reprehensible. It pays no regard whatever to the devastating social consequences in the area.
Part of a regional grants policy should be to intervene on such occasions and to provide massive incentives to companies in such areas to stay there. If they do not, the consequences are pretty appalling. For example, the crime wave becomes massive. In the area about which I am talking, someone's house is broken into every four minutes. The number of young people on heroin is growing to epidemic proportions. The problems associated with massive unemployment in such areas are phenomenal. If private companies such as United Biscuits show no sense of social or moral responsibility, Governments must be prepared to intervene to compensate.
The proposal to allow only a 90-minute debate on such important issues is insufficient. It does not take into account the arguments which I and other hon. Members have been putting forward. It does not take into account the genuine anger and desperation of hon. Members on both sides of the House who are concerned about the rundown of their communities, the devastation there and the calamities facing so many people. Therefore, I hope that the Minister will reconsider the matter. It is not necessary to use such an order. It is possible to accept that, even if it cannot be done tonight, the opportunity for a full-scale debate on these important issues can be built into the legislation in the other place. As my hon. Friend the Member for Stockton, South (Mr. Wrigglesworth) said, this is the meat and drink of what being in Parliament should be about. It is about providing jobs and opportunities and some hope in the lives of constituents who are becoming extraordinarily disillusioned and cynical about the democratic process.
If the Government do not provide opportunities to debate the issues and to provide adequate resources, they should be prepared to accept that they will create a breeding ground for the kind of militancy that we are seeing on the streets of Liverpool.

Mr. Douglas: At the kernel of the remarks by Labour Members is our concern about comprehensive changes in regional policy. We have had long debates on the Government's views both on Second Reading and in Committee. The Government have published their White Paper and the submissions should now all be in. I hope that the House will bear with me as I draw attention to one or two submissions that have come into my hands. The Scottish Council Development and Industry said:
In the case of Scotland, incentive spending should not be less than the historical level of regional development grants and selective assistance combined. At 1982 prices, the average spending over the five years to 1982–83 was £190 million per annum.
That shows that there is no support anywhere in Scotland — indeed, anywhere in the United Kingdom — for the Bill. Unfortunately, when the Bill comes to the House on Report we do not have the explanatory and financial memoranda. Therefore, it may be that some hon. Members who have not been in Committee do not have the benefit of the view that
expenditure on RDG might be reduced by some £150 to £200 million in a full year.


There is a caveat in relation to changes in selective assistance, but that is the kernel of our concern. While we and others in the country want more regional aid, the Government's policy is to reduce it.
We can all speak of our constituencies. The House will know that I represent a Fife constituency. Fife has put in a submission on the White Paper, Cmnd. 9111. It said:
It is the view of the Regional Council
—Fife regional council—
that current grant levels—and Assisted Area designations in Fife — have not been adequate to encourage sufficient worthwhile projects to create/protect jobs to proceed and a reduction in financial allocation for Regional Aid can only worsen the situation particularly in terms of the realisation of projects developed by existing companies which would assist in ensuring their continued competitiveness and resulting maintenance of job opportunities.
We are dealing with the narrow issue of how we debate matters in the House and whether there is a delay in implementation in the terms of amendment No. 53. But the important thing is that we are concerned about alterations in the Government's strategy and the amount of aid given to the regions. I have mentioned Fife and other hon. Members have mentioned the position prevailing in their constituencies. Let me put on record that in the study of peripheral areas in the United Kingdom the existing Dunfermline and Kirkcaldy travel-to-work areas were ranked 296 and 302 respectively out of the 380 travel-to-work areas in the United Kingdom. Male unemployment in some parts of those areas is over 25 per cent.
In Fife there has been an impact from the previous industrial location policy and regional policy. The uniqueness of the Fife situation was highlighted in the Scottish Office economic bulletin of December 1983 in respect of manufacturing employment. It stated:
between 1964 and 1970 Fife had a particularly high rate of incomer openings; between 1970 and 1975 incomer openings fell away but other openings were at a higher level; lastly since 1975 Fife manufacturing employment has fallen by 12 per cent.
This must be seen against the current industrial location and regional policy. If there are to be changes, they should be properly debated and analysed by all those concerned, and particularly by the House.
I speak against a background in which other jobs in Fife are being threatened. The coal industry is threatened. Last week my hon. Friend the Member for Clackmannan (Mr. O' Neill) and I had a meeting with Mr. Ian MacGregor, Mr. Cowan and Mr. Wheeler, all of the NCB, about the cessation of production at the Bogside mine, where 700 to 800 jobs were threatened. I know that other pits in the area, including Comrie and possibly Castlehill, together with pits in the constituencies of other Fife Members, may be under threat. While I do not apportion blame in terms of the current industrial dispute, we zeroed in on Bogside where millions of pounds worth of public assets were put at risk for reasons that are hard to establish. I hope to pursue this matter with the Secretary of State for Energy to ascertain whether a clear indication can be given of why these assets were put at risk.
The important ingredient is that other jobs in the area are being threatened. I refer here to a total of 90 redundancies in a firm in the defence high technology area that it was thought would have stability in the Fife region. The firm's name is MEL. We hope that certain procedures will be followed by which it will be possible to fortify and

sustain employment in that firm. This is not a case for diminution of regional aid or contraction of assisted areas, but rather a massive case for more assistance to be given.
The Government may make play of what is happening to the market economy. One of the aspects for consideration in the White Paper is wage differentials. I quote again from the response of the Scottish Council Development and Industry:
Any policy response that attempts to treat local unemployment by depressing local wage rates is likely to fail.
That view is not, "Get on your bike", but rather that one should not try to depress local wage rates. The council continued:
For what they are worth in the present context, the Council has examined official figures on earnings and has concluded that, if anything, high wage rates lead to low unemployment. Earnings are greatest in the South East, where the working week is the shortest and unemployment is the lowest of all the United Kingdom regions.
At this point we get back to a retreat, and several hon. Members referred to a retreat from the Stockton outpost of Harold Macmillan. Here we get back to a retreat from that position and the view of the Barlow committee as expressed in the 1940s that the metropolis was growing in the south-east, and ought to be contained. I have nothing against the people who live and work in the south-east, and some of its areas, of course, are depressed. Anybody who has participated in the London marathon and come through the east end of London as I have knows that. I pay a public tribute to those people, because I would not have finished if I had not had their encouragement. These people have particular problems.
The Government have a responsibility in response to our overtures to say that the place to debate these issues is the House of Commons. They ought therefore to accept the spirit and the intention of the amendments. If there are to be alterations in the designated areas, there should be a proper debate, and time should be allocated to delay the implementation of the provisions in the Bill. I ask the Government to reflect that the point I make is not a cheap one, but one of deep concern.
The Minister often comments that he is a Shetlander, and therefore knows something about the divisions in the United Kingdom. If he is capable of taking that comprehensive view, I am sure that he will accept the spirit and intention underlying the amendments.

Mr. Hind: I wish to express my concern, which was echoed by the hon. Member for Darlington (Mr. Fallon), that the substantial matter of the reorganisation of the development map for the entire country should be considered for longer than one and half hours. I represent a special development area and can tell the sort of sad story that has been told by many Opposition Members. We owe it to our constituents to debate at length, and to consider in detail, the alterations that may be made to the map as a whole.
In my constituency there are 5,000 unemployed in a town of 43,000, which means 30 per cent. unemployment. Although I support the Bill and believe it to be the seed corn of a more prosperous future, I think that the matter should be debated more fully to make the general public aware that we are at least progressing in our thoughts and offering some hope to people on the important question of regional development.
I shall support the Government, but I recommend to the Minister that he should consider, if not here then in the other place, an extension of the amount of time to be made available for consideration of this matter, so that we may express our views and so that those hon. Members who have, unfortunately, trivialised the effects of the Bill upon their constituencies may have an opportunity to express their feelings forcefully in favour of or against this important measure.

Mr. Martin J. O'Neill: I welcome the opportunity to address the House, in the knowledge that there will not be many more opportunities to speak on the subject if the Bill is passed unamended.
Many hon. Members who served on the Committee argued that the changes to the map and the criteria to be applied were being rushed through. We were conscious of the fact that the local authorities had only a limited amount of time in which to make their representations. My constituency straddles four local authorities — Falkirk district council, Stirling district council, Clackmannan district council and central region. Falkirk district and central region took great pains to make thorough and effective representations, but did so under great stress. They were hoping that, whatever form the Bill took, their cases could be argued on the Floor of the House as a last resort if the Government did their worst.
We believe that we should have an opportunity to consider the matter further and to debate the orders for more than one and a half hours if the Bill is passed. We also believe that the process should be delayed for 12 months so that further representations can be made. I think of the central region. In Scotland we do not have metropolitan authorities, but we do have upper-tier authorities which assume responsibility for strategic economic planning. Those authorities have so far survived the Secretary of State for Scotland's axe. Perhaps I tempt fate, but such authorities are still alive and well and the bulk of Scotland is still under Labour control.
Central region has been exercised by the problems which a change in regional policy would create. The problems are of a special nature in Scotland, because of its industrial base. Central region depends upon heavy, capital-intensive industries. That means that a change in the map will make that capital-intensive industry more difficult to maintain. A change will create problems for firms looking for long-term investment programmes. They may not have the confidence to invest which they had in the past. I realise that I am in danger of straying into detailed matters, but having only a short time for consultation and responses will make the problem even greater.
We need a clearer idea of the Government's criteria. We know roughly what the criteria are. We know that changes in status could be based upon percentage unemployment. The central region of Scotland, with about 16 per cent. unemployment, has the third highest unemployment level among the Scottish regions. The Falkirk travel-to-work-area is about 10th in the local unemployment league in Scotland, with 17·8 per cent. unemployment. Among the intermediate areas, the Stirling travel-to-work-area is the third highest, with about 15 per cent. unemployment. We do not know whether percentage unemployment will be taken into account.
The Minister might try to do justice to the problems of each area in a 90-minute speech. The Minister may make

a 90-minute speech to try to justify why assistance is given to one area and not to another. Perhaps I am being unduly pessimistic, but areas such as mine, which will he denied assistance, will be anxious for a detailed statement from the Dispatch Box to which we can respond. We will want to pitch in and seek to change the Government's mind, even at that late stage.
If the criteria take account of youth unemployment, the central region of Scotland must be considered because it has the highest number of school leavers in Scotland. In October 1983, 8·5 per cent. of school leavers in the central region were unemployed.
The Government might use other criteria, such as the length of time people are out of work, or the nature of redundancies. All that will take time to explain. One must remember that since 1982–83 redundancies in the central region have numbered 1,234, compared with Strathclyde, which contains half of Scotland's population, which numbered only 1,904. Taken in proportion, those figures are extremely serious.
Whatever benchmarks the Government use problems will arise, so the circumstances of each area will require special pleading. Percentage long-term unemployment or industrial structure may be used. We want to know the weighting for each criterion.

Mr. Norman Lamont: I cannot tell the hon. Gentleman what the criteria will be because, as he knows from long hours in Committee, we have asked people to give their advice and opinions on the criteria. That is one of the matters about which we are consulting.

Mr. O'Neill: The Minister has become no more forthcoming since we met in Committee. We want to know what the Government think. They must have opinions. We want to know the extent to which they will move and whether the consultation process means anything. Is it to be a White Paper, followed by a whitewash? We think that most likely. We believe that the Government have made up their mind in a way which is so unacceptable that they are hiding behind procedures which give them only 10 minutes or 15 minutes in a 90-minute debate at 10 o'clock on a Thursday night when hon. Members from the north traditionally try to get back to their constituencies.
Perhaps I am being cynical, but that is understandable because of the way in which the Government and the Secretary of State approach the problems of what they probably call the peripheral regions. I remember two weeks ago the disgusting way in which the Government dismissed the anxieties expressed by my hon. Friend the Member for Linlithgow (Mr. Dalyell) when they made their shameful announcement about the Bathgate closure. The Government have a dislike for serious debate in the House on the "peripheral regions". We need to debate matters more fully and be given the chance to put the case for each of our areas.
I represent one of the areas with a declining industrial base. Our people, unfortunately, are employed in industries which are in serious decline and which receive little assistance. In the last 18 months the central region of Scotland has received one great plum from the Government—the Wang corporation. We are extremely grateful for it. So far it has produced 80 jobs and we are led to believe that eventually it will produce about 800 jobs. At the time of its establishment it was trailed by the


Scottish Office and the Secretary of State at press conferences as a great prize. It is certainly unique, because it is the first microelectronic, computer-related investment in the central region.
Some of us who take an interest in these matters had discussions with the management of the Wang corporation, and we were impressed. We are grateful for the fact that it has arrived in Scotland but I am distressed to learn that the firm will be engaged in the area only in assembly and that development and research will take place elsewhere.
We were told that other industries were coming along. We hope that our work force is such that it will be an attraction to other firms. We have heard that the Wang corporation is not keen on having suppliers too close to it in case anything goes wrong with the firm so as to cause a multiplier effect on unmployment, which would be very great if difficulties arose. That view is estimable in many respects, but it is somewhat different from the impression that was conveyed to us 18 months ago when the great prize of Wang was presented to the people in central region as the beacon and the vanguard of the new technology coming to our area.
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We are somewhat cynical about the prospects for our area. We recognise that we are getting more than our share of redundancies and that our young people are not getting jobs. We need to debate that in the House. Scottish Members are at a disadvantage. We sometimes do not have the opportunity to get into debates in quite the same way as our English colleagues. Hon. Members from the north of England will immediately shake their heads at that, saying that Scottish Members are given a disproportionate amount of time. We say that we would probably not get much change from the Government, even if we were given more time for debates.
We recognise that the Government have turned their back on Scotland and that the only credit that they can claim for industrial development was probably used up in the 1979 general election campaign. At that time the Conservatives put out a leaflet saying that a Conservative Government had brought Corpach to Scotland, as well as works at Invergordon, Linwood and Bathgate. Those were the headlines in the Tory election literature in 1979 when they were arguing the case for regional development in a slightly different way from their approach now.
All the sites that I have mentioned have closed or are likely to close, although there is a glimmer of hope for the plant at Bathgate. I know that that hope is being sustained and supported by my hon. Friend the Member for Linlithgow, and I wish him well in his efforts to that end.
Until such time as the Government can be more forthcoming and clear in their intentions for regional policy—they will not be so tonight, as the Minister has said that he is not prepared to spell out his views on the criteria—it is essential that the House should be given further opportunities to debate the matter at length. A 90-minute debate is totally inadequate, and hon. Members would not accept that. If the consultation process is used, there should be further opportunities for local authorities and interested parties to make appropriate representations. That is why the amendment that extends the process for a further 12 months would be acceptable.
Those authorities in receipt of regional development grants are not unhappy with the present arrangements. They are sure that there are ways to improve the position, but at present they seem happy to continue for another 12 months in order to get it right. If the Government seek to carry through the policies which our worst fears suggest they will, there will be an unholy row in the House if it is treated with the effrontery which we suspect and an announcement is made denying regional assistance to substantial areas of the country.
The hon. Member for Liverpool, Mossley Hill (Mr. Alton) said that if the criteria for aid were applied we would be able to work out which areas of the country would receive regional assistance. Those areas will not be those needing it on the basis of long-term unemployment, declining industrial structure, changing occupational structure or peripherality, which is a concept close to the Secretary of State's heart. He seems to regard peripherality as an inverted concept. In other words, areas far away from London do not need assistance, but areas near to the south-east do.
With those thoughts in mind, I ask the House to support the amendments and ensure that we are given the opportunity to debate and discuss these matters. The people whom we represent can make representations later at great length, which their indignation will force them to do if the opportunity or need arises. We suspect strongly that that need and opportunity will arise all too soon.

Mr. Norman Lamont: We have had a very wide-ranging debate, which has raised the procedures by which the orders might be introduced into the House and which has gone to the heart of the argument about regional policy. Understandably, many hon. Members have referred to the problems in their constituencies.
There was no need for the hon. Member for Linlithgow (Mr. Dalyell) to apologise, as it was understandable for him to raise once again the Bathgate closure in the terms that he used. I can give him an undertaking that the Department of Trade and Industry will look sympathetically for ways in which it can help colleagues at the Scottish Office to consider a positive outcome from the approaches and declarations of interest that have already become public knowledge. The hon. Gentleman will understand that I cannot guarantee in the circumstances that help will be forthcoming, but we shall consider the matter constructively with help in mind.

Mr. Dalyell: All that I am asking for is goodwill. Does Bathgate have it?

Mr. Lamont: I hope that I have given the hon. Gentleman that assurance. He also raised the matter of the status of Bathgate travel-to-work area. Many would agree with him that there appears to be a good case on the evidence for reconsidering the DA status and upgrading the area to an SDA. But the hon. Gentleman will understand that the decisions on the whole map are about to be taken and as announcements are a few months away it would be right for us to consider status together with the map. That does not mean that we are unsympathetic to his case.
The hon. Members for Pontefract and Castleford (Mr. Lofthouse) and for Jarrow (Mr. Dixon) referred to problems in their constituencies. The hon. Member for Pontefract and Castleford made the plea, "Do not be fooled by the position in the south-east." I have been


accused by the hon. Member for Dunfermline, West (Mr. Douglas) of trotting out the fact that I come from the Shetland islands. Perhaps I can trot out now that I represent a constituency in the south-east, at the other end of the regional spectrum. I constantly tell my constituents how fortunate they are to have an unemployment rate that is half the national average and that our situation is completely different from that in Scotland, the north-east or the north-west.
The Government are very mindful that the situation that appertains in areas in the south-east, including my constituency, is completely different from that in the constituencies of the hon. Members for Pontefract and Castleford and for Jarrow. That is why we are committed to maintaining an effective regional policy geared more to employment than to the subsidisation of capital intensive projects. We have said that we want to maintain an effective regional policy. We mean by "effective" that we should use the money, rather than pouring it into the regions, to bring about a more equal distribution of employment opportunities throughout the country.
The hon. Member for Pontefract and Castleford made an interesting point when he said that he felt that there was an argument for at least one tier of assisted area status in order to qualify for the European regional development fund money. I note what he said, and that point has also been made to us by several people.
Incidentally, that relates to a point made by the right hon. Member for Swansea, West (Mr. Williams), which I should like to contradict. I have never said that there was a case for getting rid of the intermediate area tier. What I have mentioned, and what is reflected in the White Paper, is whether there should be two or three tiers. To some extent, we discussed that in Committee, but I have never suggested that we should get rid of intermediate area status, under which an area qualifies for discretionary and not automatic assistance. That is why I was extremely interested in the point made by the hon. Member for Pontefract and Castleford.

Mr. Williams: I have no wish to misrepresent the Minister's views. Special development areas and development areas are written into the Bill, so when the hon. Gentleman said that it might be two areas rather than three it was not unreasonable for us to conclude that intermediate area status was at risk.

Mr. Lamont: The Bill concerns regional development grants and that is why we have not talked very much about intermediate areas.
I very much agreed with the hon. Member for Jarrow. He mentioned that in the north and north-east there was a branch plant economy, and that the area suffered greatly from decisions being made by companies with headquarters outside the region. We would very much like to see more services, more company headquarters and more research and development in that area. That is one of the arguments for extending the regional development grant scheme to the service sectors. I am sure that my hon. Friend the Member for Darlington (Mr. Fallon) will agree that the economy of the north and the north-east in particular could benefit enormously from diversifying away from the purely manufacturing industries to include more of the service industries.
The hon. Member for Stockton, South (Mr. Wrigglesworth) repeated some of the points made about

his area. I am a little surprised that SDP Members are not slightly more critical or questioning about regional policy, especially given the extent to which they have been prepared to reconsider some of the ideas that they used to support when in office. I am surprised that they have not been concerned about value for money, or about whether regional policy has produced the results claimed for it after all these years. Why are SDP Members not concerned about the effects of regional policy on the non-assisted areas?
However, I certainly agree that the Department of Trade and Industry is top when it comes to the number of Departments that have received representations or held consultations on this matter and certain others. The consultation period went on for five and a half months, which is a long time. Incidentally, I was astonished that the hon. Member for Clackmannan (Mr. O'Neill) should have made that point from the Back Benches a few moments ago, and I congratulate him on his resurrection on the Opposition Front Bench. Perhaps it was not the same person who spoke from the Back Benches. Perhaps he was not being entirely serious when he said that he wanted to hear the Government's views on the criteria for regional policy, and that it was all very well the Government saying that they were consulting, but that they should declare their views, and Ministers should he more forthcoming. I am aware that the hon. Gentleman knows perfectly well that the consultation period ended only last Thursday. People could make representations as recently as then. If the hon. Gentleman saw the volume of literature that we have received, he would not expect me to have come to a conclusion by today.

Mr. Douglas: I know that it is difficult for the Minister to undertake that a debate will be held, but will he tell the Leader of the House that hon. Members would benefit from a substantial debate and discussion being held on those submissions? May we at least have a promise from the Minister that a precis of the evidence submitted will be placed in the Vote Office?

Mr. Lamont: On that latter point, I shall certainly see what can be done. However, we have already published quite a lot of material relating to the academic studies carried out on regional policy. I shall come to the hon. Gentleman's first point in a moment, but I shall certainly impress on my right hon. Friend the Leader of the House the points that have been made and the strong feelings that have been expressed about the need for a proper debate and to take all these decisions together.
The right hon. Member for Glasgow, Govan (Mr. Millan) spoke about the form in which the orders might be presented to the House and en passant he complained about the Government introducing legislation while at the same time purporting to be consulting. The Government always made it clear that they had formed a view on certain aspects of regional policy, such as the need to make it more job-related and to look for some savings in the capital intensive support through regional development grants, but that we wanted to consult on all the matters laid out in the White Paper. There has never been any secret about that. Indeed, that is why the legislation has been introduced. We want to obtain the benefits of it at an early date. Nevertheless, our consultation is genuine and we pay


serious attention to the views put to us by hon. Members, different trade associations, local councils and all the other bodies.
Many Opposition Members assumed that there would be massive cuts in the map. The figures for savings of £150 million to £200 million that are given in the explanatory memorandum are based on the existing map. We have always said that we want to look for savings, but they will come from the adjustments to regional development grants, including such items as the cost per job limit, taking out non-job-creating modernisation, taking out replacement investment and so on. The savings are based on the existing map, and the right hon. Member for Govan should not necessarily assume the worst, and that there will be a massive carve-up of the map.

Mr. Millan: That means that the savings will be even greater than is provided for in the explanatory memorandum. Paragraph 34 of the Government's White Paper talks about a substantial reduction in expenditure and says that the extent of it will depend primarily on the scheme's geographical coverage and on the rates of grant. If the Minister is saying that the savings of £150 million to £200 million are only being made on the new scheme provided in the Bill, and have nothing to do with geographical coverage, we can expect even greater savings and thus even more damage to the assisted areas.

Mr. Lamont: The right hon. Gentleman is not justified in such an assumption. In addition to the savings based on the existing map, which are detailed in the explanatory memorandum, there is the question of whether we might make offsetting selective financial assistance available to compensate for some of the savings referred to in the memorandum, which take no account of any offsetting expenditure that might be incurred through increased selective financial assistance. That point has been made again and again. I have made it simply to emphasise that we have not as yet made any decisions about the map.
Amendments Nos. 3 and 4 would introduce the affirmative resolution procedure for changes in the map, whereas we have always had the negative procedure. We are now consulting on the map; indeed, the period of consultation will have lasted for five and a half months. It is better that we should have that period of consultation now, before decisions are made.
We must remember that we are dealing with a cluster of orders. I have noted what has been said about hon. Members regarding it as unsatisfactory if there were only a one-and-a-half hour debate, and I shall make that view clear to my right hon. Friend the Leader of the House. I made that point in Standing Committee.

Mr. Millan: What did the Minister mean by there being a clutch of orders relating to the map? The map could be dealt with by one order.

Mr. Lamont: I referred to a cluster of orders. They relate to the rates of grant, the qualifying activities and the map. There will be a series of decisons relating to regional policy affecting the constituencies of many hon. Members. I will draw to the attention of the Leader of the House the feeling that there should be a full debate on these issues, as we had when changes were made in 1982.
It is argued in relation to amendments Nos. 5, 6 and 47 that the affirmative procedure should be adopted for

qualifying activities. Although this may not be an overwhelming argument for what is proposed, it must be borne in mind that in the past qualifying activities have been amended in the way that is now proposed.
The Opposition might argue that in the past the qualifying activities were defined in the legislation. We have undertaken that all the activities that now qualify will qualify again; it will be a question of addition, and that will apply in the service areas because we have wanted to extend RDG in that way. In those circumstances, I could not agree that the affirmative procedure should be adopted.
I listened carefully to what was said on amendment No. 53, but Opposition Members will not expect me even to flirt with the idea that the changes should be postponed for a year. The hon. Member for St Helens, South (Mr. Bermingham) spoke about the problems of his constituency and agreed that the map needed to be changed. There is an overwhelming case for doing that and for adjusting to the changed circumstances.
Underlying what has been said on this series of amendments has been not just concern about the way in which the individual orders will be dealt with by the House. It has been more a debate about the fundamentals of regional policy, and on that there is disagreement between the two sides of the House. We argue that, while in the past we have spent massive sums on regional policy, the effects in terms of ironing out the differences in the various regions have not been dramatically successful.
The hon. Member for Dunfermline, West spoke of the decline in manufacturing industry in some assisted areas. That should lead us to question whether the money has been spent effectively in the past. We must pause and reflect that many present assisted areas were assisted areas in the 1930s. Each new job—there have not been that many of them—created in the assisted areas by regional policy has cost about £35,000. There is also the argument about the effect of regional policy on non-assisted areas. They are all factors that we must take into account in our review of regional policy.
Opposition Members constantly complain that it is wrong to look for any savings in regional policy. Does it matter to them whether the money is spent sensibly? The answer is no. Their attitude is simply that the money so spent should remain high in total. That is all that worries them, not whether it is spent effectively. That is why I urge the House to oppose the amendment.

Mr. Geoffrey Robinson: For sheer hypocrisy and irrelevance, the Minister's closing remarks take the biscuit. I hasten to assure him, as we did in Committee, that we are as anxious as he is to achieve the most cost-effective spending in the regions. We have failed to convince him, however, that he cannot have an effective regional policy when he is already committed to cutting, as savagely as the Government propose, the RDG by £150 million to £200 million. The hon. Gentleman adds insult to injury by telling us that none of this is required by the EEC—we shall come to that when we debate a later amendment — but simply because it meets the Government's industrial and regional criteria.
My hon. Friends have made moving speeches on this issue and their remarks have reflected opinion in many parts of the country. If they did not convince the Minister of the need for at least a two-day debate, comprising two one and a half hour debates, together with the adoption of the affirmative resolution procedure for orders dealing


with the map, he should at least take note of what was said in an EEC regional directive on the subject as recently as March of this year.
Referring to areas in the Community with the greatest problems relating to economic structure regionally, with unemployment problems and disequilibrium in the labour market, it listed Ireland, Northern Ireland, southern Italy, — the Mezzogiorno — most regions in Greece, and Corsica in France. However, that EEC body, which studies these matters with impartiality, depth of knowledge and tremendous commitment to achieving effective regional spending — Mr. Giolitti cannot be bettered, even by the commitment of the Minister of State, in getting value for money — concluded in its latest report in March that to those regions with the most serious problems had to be added the regions of Merseyside, Dumfries and Galloway, Strathclyde, Northumberland, Tyne and Wear, Cleveland, Durham, Gwent, mid, south and west Glamorgan, Cornwall, Devon and the west midlands, all of them in the United Kingdom.
That is the way in which the EEC sees our regional problems and that is how, when the new map and other statutory instruments are placed before the House, hon. Members will view the situation. Something better might have been expected from the Minister today, after the hours of debate in Committee devoted to the subject. Even this afternoon's debate has lasted for more than two hours, longer than the Minister envisages the House having to debate the major decisions, when we receive them.
In what he no doubt thought would be a telling intervention, the hon. Member for Darlington (Mr. Fallon) said that our proposals would create uncertainty. If so, there would be no difficulty in amending amendment No. 53. To eliminate uncertainty, the procedure for having a consultation period of one year could be adopted, but only for those areas to be downgraded or in some way adversely affected.

Mr. Fallon: Presumably there would still be uncertainty because for a year the political lobbying of the sort that the hon. Gentleman wants to encourage would be allowed to take place.

Mr. Robinson: That is precisely what was done in 1980 and I presume that it was then considered to be the most effective course. For example, anyone convicted of murder would be grateful for one year's reprieve before his sentence took effect. Uncertainty would not be created in the areas that were being upgraded or benefiting from regional policy. Therefore, there could be no deterrent effect on overseas investment.
My hon. Friend the Member for Pontefract and Castleford (Mr. Lofthouse) made a moving contribution. He has great experience in the mining industry and is only too well aware of the result of contraction. My hon. Friend the Member for Linlithgow (Mr. Dalyell) talked about Bathgate. We can only fear for the worst when we reflect on the disgracefully abrasive dismissal of the Bathgate work force and all that it has achieved by the Secretary of State for Scotland. My hon. Friend the Member for Jarrow (Mr. Dixon) talked about an area that has suffered more than most areas and reminded us that the suffering is likely to become worse. He drew attention to the dangers of the branch economy which has been established.
My hon. Friend the Member for St. Helens, South (Mr. Bermingham) represents a Merseyside seat and he made

a telling contribution to the debate. My hon. Friends the Members for Dunfermline, West (Mr. Douglas) and for Clackmannan (Mr. O'Neill) also made telling contributions. My hon. Friend the Member for Clackmannan made many informed speeches in Committee.
This has been a compressed debate. I do not think that anyone has spoken for more than 10 minutes. The views of hon. Members have been expressed clearly, but it seems that we have been unable to convince the Minister of the need to accept amendment No. 4. I ask him to reflect on what the Commission has said about the severity of the spread of the regional problem in the United Kingdom. Coventry, part of which I represent, has already made an application to discuss with the Secretary of State its request for assisted area status. Such requests are inevitable. As in 1980, they will come especially from areas that are to be downgraded in status. If the Government fail to provide for these requests, they will pre-empt a meaningful pattern of discussion and consultation for those who will be adversely affected.
We have heard the Minister's protestations on the keenness and sincerity of the Government's wish for consultation. He stressed that there has been a long period of consultation and it seemed that the tonnes of paper representations were weighing heavily on his conscience, as well they might. Those words were nothing more than impertinent hypocrisy.
Was there any consultation on the cut of £150 million to £200 million in regional development grant? Who 'was consulted about that? That cut came forward in the Bill and we have not succeeded in changing it. There were no consultations on that score. Were we consulted on the elimination of non-job-creating modernisation? That proposal will have, when implemented, a terrible effect on all the regions because it is based on a factor that is built into all their cost structures. These are pre-announced Government decisions.
What about the famous EC limits? Were we consulted on making regional policy so explicitly conditional to EC limits? Who was consulted on the prescribed limit, the job-capping limit? Was anyone consulted? The House will know that consultation is not required by the EC legislation. The Minister's words are sheer cant and I know that my right hon. and hon. Friends will not be taken in by his emollient comments on the constituency problems about which they have spoken. He is not interested in those matters. The Minister would not have adopted the same tone if the hon. Member for Wolverhampton, South-West (Mr. Budgen) had been in his place. If the hon. Gentleman had been present, he would have intervened in the Minister's speech to ask him not to resile from the key plank in the Government's regional policy, which is to cut expenditure. As I have said, all the rest is sheer cant.
We are asking for a two-day debate and for the map to be subjected to the affirmative resolution procedure. That procedure was not adopted when the Labour Government introduced their legislation but that Government were intent on providing more aid for the regions and expanding the map. A different set of circumstances applied at that time. This Government are committed to doing down the regions. They intend to introduce a prescribed limit that will eat into the capital regional development grant which


is available to companies investing in the regions. In my opinion, a smaller amount of money will be spread over a much wider area.
The Minister is saying that we must secure the EC grants and that a wide spread of areas will be designated as qualifying for various levels of assistance. On the other hand, he has told his hon. Friend the Member for Wolverhampton, South-West time after time that it is the Government's policy to reduce regional expenditure. How can the Government reduce expenditure and expand the area that receives development aid? He then tells us that areas that have been sustained by regional aid will not be very much worse off when the Government's proposals are implemented. He knows that there is no logic in that as well as we know it. As I have said, we are asking for a two-day debate and for the affirmative resolution procedure to be adopted. We should like to ask for much more, but we know that we should not get it. If the Minister refuses to accede to our request, he will be insulting the House and abusing its procedures.
I agree with the Minister that the lack of transitional arrangements for the map will not have a great effect upon the country and that the main changes will be felt by the special development areas within the wider area. If the map is not greatly changed and areas continue to qualify, it must follow that total expenditure will be reduced by the three limits that the Government are introducing—the prescribed amount, the prescribed percentage and the prescribed limit. If that happens, companies will need time to adjust. Local authorities will need time to consider the problems that are posed for companies in their areas. Against that background amendment No. 53 is a mild, moderate and acceptable proposition. However, the Minister refuses to accept amendments Nos. 4 and 53, and that gives the lie to his protestations on regional policy, to his concern about unemployment in the regions and to the Government's commitment to ensure that the regions are sustained as they were under Labour Governments.
The Minister argued that unemployment increased in the regions despite the large sums that were provided in regional aid. He contended that regional policy cannot be said to have had an immense impact. That is not a real argument. Heaven knows what unemployment would be like now if we had not had the regional policy that was implemented by Labour Governments. I urge my right hon. and hon. Friends to support amendments Nos. 4 and 53.

Mr. Millan: When I introduced these rather modest amendments I did not appreciate that such a wide-ranging debate would ensue. The debate has shown the depth of feeling that exists in the House, especially on the Opposition Benches, and the depth of apprehension about what might happen if the Bill is implemented and the new assisted area map is presented.
I do not intend to repeat the arguments that have been advanced so effectively by my hon. Friend the Member for Coventry, North-West (Mr. Robinson). I wish to return again to the issue of savings. It must be true that the savings of £150 million to £200 million which were written into the financial memorandum to the original Bill were based on the present assisted areas map. If that is so, the total savings being sought by the Government are almost certainly considerably greater than those sums. It is not

much of an excuse to say that there may be more in the way of selective financial assistance, for that assistance is not covered by the Bill. The Government have not explained in the White Paper or elsewhere how they might supplement the reduced level of regional assistance that will flow from the Bill by an increased emphasis on selective assistance. I hope that I shall be able to take up that issue when we discuss later amendments.

Mr. Norman Lamont: If the right hon. Gentleman had been a member of the Standing Committee he would know that I said that the Government intend that there should be an increase in selective financial assistance specifically to deal with modernisation projects and the safeguarding of employment. That has to be set against the savings that are referred to in the explanatory memorandum.

Mr. Millan: We might attach some importance to that point if the Minister put a figure on it. He has given a figure for the savings that will result from the Bill. Will he provide a figure for the additional money that he might spend under selective financial assistance? The hon. Gentleman shakes his head. Until we have that figure and can ascertain how the measure works in practice, we must treat the Minister's statements on the matter with considerable scepticism. If the assisted area map is greatly reduced, there will be savings in addition to the £150 million and £200 million that are cited in the financial memorandum.
Opposition Members have expressed much concern about the map. Amendment No. 4 is important because the map could be changed even if this Bill did not reach the statute book. The map could be changed under existing legislation with the use of the negative procedure. The Opposition have made it clear that, if the Government were to make substantial changes in the assisted area map, there would be a widespread demand in the House for the fullest possible debate. We cannot even make amendments to orders and that is highly unsatisfactory. Even under the affirmative procedure provided for in my amendment, the debate could be truncated.
The reason for pressing the amendment is that, with an affirmative procedure, we are guaranteed some type of debate; we are not guaranteed even that with the negative procedure. Even in pressing for the affirmative procedure we point out that there should be a more substantial debate on it than is possible in one and a half hours. I hope that the Minister has taken that point on board and will convey those representations to the Leader of the House. We shall press the amendment. I hope that the Minister understands that we want a substantial debate.
The Government's supplement to the White Paper demonstrates that, contrary to popular belief, in terms of the proportion of total population covered by assisted areas Great Britain is at the bottom end of the range compared with other countries in the EEC. That point is brought out on page 130 of the Government document. Some of us would like the proportion to be considerably increased. We therefore trust that, whatever changes are made, there will be no reductions that will take us even further down the range in comparison with other European countries when, in real terms, we have about 4 million unemployed. Unemployment figures show that, in five of the past six months, the underlying unemployment rate has continued to increase. An appalling position is faced in many parts of the country, including my constituency.
The Minister said that in the past we have dealt with qualifying activities by negative procedure. Those activities were defined in the legislation by reference to the standard industrial classification. More important, we are talking now about extending the range of qualifying activities with respect to services. There must be a significant debate in the House when the Government make their conclusions on those activities. There will be much non-party agreement on certain service activities that should be included, and which we are not guaranteed the Government will include. The new position will be entirely different from the circumstances covered by the Industry Act 1972 and the Industrial Development Act 1982. I hope that the Minister will take that point on board.
Amendment No. 53 has been dealt with comprehensively by Opposition Members. I hope that there will be support for amendment No. 4, including from Conservative Members who are worried about their areas. Judging by their past performance, I do not say that with a great deal of optimism.
I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendment proposed, No. 4, in page 4, line 7, at end add—
`(2) In section 1 of the Industrial Development Act 1982 for subsection (7) there shall be substituted the following subsection:
(7) An order under this section shall be made by statutory instrument and shall not be made unless a draft of it has been approved by resolution of each House of Parliament.".'.—[Mr. Milton.]

Question put, That the amendment be made:—

The House divided: Ayes 100, Noes 169.

Division No. 339]
[6.44 pm


AYES


Alton, David
Gourlay, Harry


Bagier, Gordon A. T.
Hamilton, James (M'well N)


Barnett, Guy
Hamilton, W. W. (Central Fife)


Beith, A. J.
Hardy, Peter


Bermingham, Gerald
Harman, Ms Harriet


Bidwell, Sydney
Harrison, Rt Hon Walter


Boyes, Roland
Hogg, N. (C'nauld &amp; Kilsyth)


Bray, Dr Jeremy
Home Robertson, John


Brown, Ron (E'burgh, Leith)
Hughes, Sean (Knowsley S)


Bruce, Malcolm
Kaufman, Rt Hon Gerald


Callaghan, Jim (Heyw'd &amp; M)
Leighton, Ronald


Clark, Dr David (S Shields)
Lewis, Terence (Worsley)


Clarke, Thomas
Litherland, Robert


Clwyd, Ms Ann
Lloyd, Tony (Stretford)


Cocks, Rt Hon M. (Bristol S.)
Lofthouse, Geoffrey


Cook, Frank (Stockton North)
McCartney, Hugh


Cook, Robin F. (Livingston)
McDonald, Dr Oonagh


Corbett, Robin
McKay, Allen (Penistone)


Corbyn, Jeremy
McKelvey, William


Cowans, Harry
Mackenzie, Rt Hon Gregor


Crowther, Stan
McNamara, Kevin


Dalyell, Tam
McTaggart, Robert


Davies, Ronald (Caerphilly)
Madden, Max


Dormand, Jack
Marek, Dr John


Douglas, Dick
Marshall, David (Shettleston)


Dunwoody, Hon Mrs G.
Mason, Rt Hon Roy


Eadie, Alex
Maxton, John


Eastham, Ken
Millan, Rt Hon Bruce


Edwards, Bob (W'h'mpt'n SE)
Mitchell, Austin (G't Grimsby)


Evans, John (St. Helens N)
Nellist, David


Fatchett, Derek
Oakes, Rt Hon Gordon


Field, Frank (Birkenhead)
O'Neill, Martin


Flannery, Martin
Orme, Rt Hon Stanley


Foot, Rt Hon Michael
Pendry, Tom


Foulkes, George
Pike, Peter


Freeson, Rt Hon Reginald
Powell, Raymond (Ogmore)


Freud, Clement
Prescott, John


George, Bruce
Randall, Stuart


Gould, Bryan
Redmond, M.





Richardson, Ms Jo
Thomas, Dafydd (Merioneth)


Robinson, G. (Coventry NW)
Thomas, Dr R. (Carmarthen)


Rogers, Allan
Tinn, James


Rooker, J. W.
Wareing, Robert


Ross, Stephen (Isle of Wight)
Welsh, Michael


Rowlands, Ted
Williams, Rt Hon A.


Sheerman, Barry
Winnick, David


Sheldon, Rt Hon R.
Wrigglesworth, Ian


Short, Ms Clare (Ladywood)
Young, David (Bolton SE)


Silkin, Rt Hon J.



Skinner, Dennis
Tellers for the Ayes:


Snape, Peter
Mr. Frank Haynes and Mr. Don Dixon.


Spearing, Nigel





NOES


Adley, Robert
Hargreaves, Kenneth


Amess, David
Harris, David


Ancram, Michael
Harvey, Robert


Arnold, Tom
Hawkins, C. (High Peak)


Ashby, David
Hawksley, Warren


Aspinwall, Jack
Hayes, J.


Atkins, Rt Hon Sir H.
Hayward, Robert


Baker, Rt Hon K. (Mole Vall'y)
Heathcoat-Amory, David


Baker, Nicholas (N Dorset)
Hickmet, Richard


Baldry, Anthony
Higgins, Rt Hon Terence L.


Beaumont-Dark, Anthony
Hind, Kenneth


Bellingham, Henry
Hirst, Michael


Berry, Sir Anthony
Holt, Richard


Biggs-Davison, Sir John
Hooson, Tom


Bottomley, Peter
Hordern, Peter


Bottomley, Mrs Virginia
Howard, Michael


Bowden, Gerald (Dulwich)
Howarth, Alan (Stratf'd-on-A)


Brandon-Bravo, Martin
Howarth, Gerald (Cannock)


Bright, Graham
Howell, Rt Hon D. (G'ldford)


Brinton, Tim
Howell, Ralph (N Norfolk)


Brooke, Hon Peter
Hubbard-Miles, Peter


Brown, M. (Brigg &amp; Cl'thpes)
Hunt, David (Wirral)


Bruinvels, Peter
Hunt, John (Ravensbourne)


Bryan, Sir Paul
Hunter, Andrew


Buchanan-Smith, Rt Hon A.
Jessel, Toby


Buck, Sir Antony
Johnson-Smith, Sir Geoffrey


Budgen, Nick
Key, Robert


Burt, Alistair
King, Roger (B'ham N'field)


Butcher, John
Knight, Gregory (Derby N)


Carlisle, John (N Luton)
Knowles, Michael


Carttiss, Michael
Lamont, Norman


Chalker, Mrs Lynda
Lang, Ian


Channon, Rt Hon Paul
Lawrence, Ivan


Clark, Hon A. (Plym'th S'n)
Lee, John (Pendle)


Cockeram, Eric
Leigh, Edward (Gainsbor'gh)


Colvin, Michael
Lennox-Boyd, Hon Mark


Conway, Derek
Lightbown, David


Coombs, Simon
Lloyd, Peter, (Fareham)


Cope, John
Luce, Richard


Dicks, Terry
Lyell, Nicholas


Douglas-Hamilton, Lord J.
McCrindle, Robert


Durant, Tony
McCurley, Mrs Anna


Eggar, Tim
Macfarlane, Neil


Evennett, David
MacGregor, John


Fairbairn, Nicholas
MacKay, John (Argyll &amp; Bute)


Fallon, Michael
Maclean, David John


Favell, Anthony
Major, John


Finsberg, Sir Geoffrey
Malins, Humfrey


Fookes, Miss Janet
Malone, Gerald


Forman, Nigel
Mather, Carol


Forth, Eric
Maude, Hon Francis


Fox, Marcus
Maxwell-Hyslop, Robin


Franks, Cecil
Mayhew, Sir Patrick


Freeman, Roger
Mellor, David


Fry, Peter
Merchant, Piers


Gale, Roger
Meyer, Sir Anthony


Goodhart, Sir Philip
Mills, lain (Meriden)


Goodlad, Alastair
Mills, Sir Peter (West Devon)


Gower, Sir Raymond
Moate, Roger


Gregory, Conal
Montgomery, Fergus


Griffiths, Peter (Portsm'th N)
Moynihan, Hon C.


Ground, Patrick
Mudd, David


Hamilton, Hon A. (Epsom)
Murphy, Christopher


Hampson, Dr Keith
Neale, Gerrard


Hanley, Jeremy
Needham, Richard






Nelson, Anthony
Steen, Anthony


Neubert, Michael
Stern, Michael


Nicholls, Patrick
Stevens, Lewis (Nuneaton)


Norris, Steven
Terlezki, Stefan


Onslow, Cranley
Thompson, Donald (Calder V)


Oppenheim, Philip
Thompson, Patrick (N'ich N)


Page, Richard (Herts SW)
Thorne, Neil (Ilford S)


Peacock, Mrs Elizabeth
Trippier, David


Porter, Barry
Viggers, Peter


Powell, William (Corby)
Wakeham, Rt Hon John


Powley, John
Wardle, C. (Bexhill)


Prentice, Rt Hon Reg
Warren, Kenneth


Price, Sir David
Wells, Bowen (Hertford)


Proctor, K. Harvey
Wheeler, John


Rees, Rt Hon Peter (Dover)
Wilkinson, John


Ridley, Rt Hon Nicholas
Wood, Timothy


Ridsdale, Sir Julian
Young, Sir George (Acton)


Sainsbury, Hon Timothy



Shersby, Michael
Tellers for the Noes:


Skeet, T. H. H.
Mr. Douglas Hogg and Mr. Tristan Garel-Jones.


Smith, Tim (Beaconsfield)



Spencer, Derek

Question accordingly negatived.

Clause 5

NEW SCHEME OF REGIONAL DEVELOPMENT GRANTS

Amendment made: No. 7, in page 4, line 21, leave out `(6)' and insert `(7)'.—[Mr. Norman Lamont.]

Clause 7

COMMENCEMENT AND TRANSITION

Amendment proposed: No. 53, in page 5, line 10, after
`instrument', insert
`such day not being earlier than one year after the date of the statutory instrument'.

Question put, That the amendment be made:—

The House divided: Ayes 99, Noes 161.

Division No. 340]
[6.57 pm


AYES


Adams, Allen (Paisley N)
Foot, Rt Hon Michael


Alton, David
Foulkes, George


Bagier, Gordon A. T.
Freud, Clement


Barnett, Guy
George, Bruce


Beith, A. J.
Godman, Dr Norman


Bennett, A. (Dent'n &amp; Red'sh)
Gould, Bryan


Bermingham, Gerald
Gourlay, Harry


Bidwell, Sydney
Hamilton, James (M'well N)


Boyes, Roland
Hamilton, W. W. (Central Fife)


Bray, Dr Jeremy
Hardy, Peter


Brown, Ron (E'burgh, Leith)
Harman, Ms Harriet


Bruce, Malcolm
Harrison, Rt Hon Walter


Callaghan, Jim (Heyw'd &amp; M)
Hogg, N. (C'nauld &amp; Kilsyth)


Clark, Dr David (S Shields)
Home Robertson, John


Clwyd, Ms Ann
Hughes, Sean (Knowsley S)


Cocks, Rt Hon M. (Bristol S.)
Kaufman, Rt Hon Gerald


Colvin, Michael
Leighton, Ronald


Cook, Frank (Stockton North)
Lewis, Terence (Worsley)


Cook, Robin F. (Livingston)
Litherland, Robert


Corbett, Robin
Lofthouse, Geoffrey


Cowans, Harry
McCartney, Hugh


Dalyell, Tam
McDonald, Dr Oonagh


Davies, Ronald (Caerphilly)
McKay, Allen (Penistone)


Dormand, Jack
McKelvey, William


Douglas, Dick
Mackenzie, Rt Hon Gregor


Dunwoody, Hon Mrs G.
McNamara, Kevin


Eadie, Alex
McTaggart, Robert


Eastham, Ken
McWilliam, John


Edwards, Bob (Wh'mpt'n SE)
Madden, Max


Evans, John (St. Helens N)
Marek, Dr John


Fatchett, Derek
Marshall, David (Shettleston)


Field, Frank (Birkenhead)
Mason, Rt Hon Roy


Flannery, Martin
Maxton, John





Millan, Rt Hon Bruce
Sheldon, Rt Hon R.


Mitchell, Austin (G't Grimsby)
Short, Ms Clare (Ladywood)


Nellist, David
Silkin, Rt Hon J.


Oakes, Rt Hon Gordon
Skinner, Dennis


O'Neill, Martin
Snape, Peter


Orme, Rt Hon Stanley
Spearing, Nigel


Pendry, Tom
Thomas, Dafydd (Merioneth)


Pike, Peter
Tinn, James


Powell, Raymond (Ogmore)
Wareing, Robert


Prescott, John
Welsh, Michael


Randall, Stuart
Williams, Rt Hon A.


Redmond, M.
Winnick, David


Richardson, Ms Jo
Wrigglesworth, Ian


Robinson, G. (Coventry NW)
Young, David (Bolton SE)


Rogers, Allan



Rooker, J. W.
Tellers for the Ayes:


Ross, Stephen (Isle of Wight)
Mr. Frank Haynes and Mr. Don Dixon.


Rowlands, Ted



Sheerman, Barry





NOES


Adley, Robert
Griffiths, Peter (Portsm'th N)


Amess, David
Ground, Patrick


Ancram, Michael
Hamilton, Hon A. (Epsom)


Arnold, Tom
Hampson, Dr Keith


Ashby, David
Hanley, Jeremy


Aspinwall, Jack
Hargreaves, Kenneth


Atkins, Rt Hon Sir H.
Harris, David


Baker, Nicholas (N Dorset)
Harvey, Robert


Baldry, Anthony
Hawkins, C. (High Peak)


Beaumont-Dark, Anthony
Hawksley, Warren


Bellingham, Henry
Hayes, J.


Berry, Sir Anthony
Hayward, Robert


Biggs-Davison, Sir John
Heathcoat-Amory, David


Bottomley, Peter
Hind, Kenneth


Bottomley, Mrs Virginia
Hirst, Michael


Bowden, Gerald (Dulwich)
Hogg, Hon Douglas (Gr'th'm)


Bright, Graham
Holt, Richard


Brinton, Tim
Hooson, Tom


Brooke, Hon Peter
Howard, Michael


Brown, M. (Brigg &amp; Cl'thpes)
Howarth, Alan (Stratf'd-on-A)


Bruinvels, Peter
Howarth, Gerald (Cannock)


Bryan, Sir Paul
Howell, Rt Hon D. (G'ldford)


Buchanan-Smith, Rt Hon A.
Howell, Ralph (N Norfolk)


Buck, Sir Antony
Hubbard-Miles, Peter


Budgen, Nick
Hunt, David (Wirral)


Burt, Alistair
Hunt, John (Ravensbourne)


Butcher, John
Hunter, Andrew


Carlisle, John (N Luton)
Jessel, Toby


Carttiss, Michael
Johnson-Smith, Sir Geoffrey


Chalker, Mrs Lynda
Key, Robert


Channon, Rt Hon Paul
King, Roger (B'ham N'field)


Clark, Hon A. (Plym'th S'n)
Knight, Gregory (Derby N)


Cockeram, Eric
Knowles, Michael


Colvin, Michael
Lamont, Norman


Conway, Derek
Lawrence, Ivan


Coombs, Simon
Lee, John (Pendle)


Cope, John
Leigh, Edward (Gainsbor'gh)


Dicks, Terry
Lennox-Boyd, Hon Mark


Douglas-Hamilton, Lord J.
Lightbown, David


Durant, Tony
Lloyd, Peter, (Fareham)


Eggar, Tim
Luce, Richard


Evennett, David
Lyell, Nicholas


Fairbairn, Nicholas
McCrindle, Robert


Fallon, Michael
McCurley, Mrs Anna


Favell, Anthony
Macfarlane, Neil


Finsberg, Sir Geoffrey
MacKay, John (Argyll &amp; Bute)


Fookes, Miss Janet
Maclean, David John


Forman, Nigel
Major, John


Forth, Eric
Malins, Humfrey


Fox, Marcus
Malone, Gerald


Franks, Cecil
Mather, Carol


Freeman, Roger
Maude, Hon Francis


Fry, Peter
Maxwell-Hyslop, Robin


Gale, Roger
Mayhew, Sir Patrick


Garel-Jones, Tristan
Mellor, David


Goodhart, Sir Philip
Merchant, Piers


Goodlad, Alastair
Meyer, Sir Anthony


Gower, Sir Raymond
Mills, lain (Meriden)


Gregory, Conal
Mills, Sir Peter (West Devon)






Moate, Roger
Shersby, Michael


Montgomery, Fergus
Skeet, T. H. H.


Moynihan, Hon C.
Smith, Tim (Beaconsfield)


Mudd, David
Spencer, Derek


Murphy, Christopher
Steen, Anthony


Neale, Gerrard
Stevens, Lewis (Nuneaton)


Needham, Richard
Terlezki, Stefan


Nelson, Anthony
Thompson, Donald (Calder V)


Neubert, Michael
Thompson, Patrick (N'ich N)


Nicholls, Patrick
Thorne, Neil (Ilford S)


Norris, Steven
Trippier, David


Onslow, Cranley
Viggers, Peter


Oppenheim, Philip
Wakeham, Rt Hon John


Page, Richard (Herts SW)
Wardle, C. (Bexhill)


Peacock, Mrs Elizabeth
Warren, Kenneth


Porter, Barry
Wells, Bowen (Hertford)


Powell, William (Corby)
Wheeler, John


Powley, John
Wood, Timothy


Prentice, Rt Hon Reg
Young, Sir George (Acton)


Price, Sir David



Proctor, K. Harvey
Tellers for the Noes:


Rees, Rt Hon Peter (Dover)
Mr. Ian Lang and Mr. Tim Sainsbury.


Ridley, Rt Hon Nicholas
Mr. Tim Sainsbury.


Ridsdale, Sir Julian

Question accordingly negatived.

Schedule 1

NEW REGIONAL DEVELOPMENT GRANTS

Mr. Williams: I beg to move amendment No. 55, in page 7, line 21, after 'provision', insert 'and preservation'.

Mr. Speaker: With this it will be convenient to take the following amendments:
No. 56, in page 8, line 8, at end insert 'as well as creation of new jobs'.
No. 15, in page 9, line 22, after 'provided', insert `maintained or safeguarded'.
No. 16, in page 9, line 29. leave out from (b) to `aggregate' in line 30.
No. 17, in page 9, line 31, leave out from 'full-time' to end of line 34.
No. 22, in page 10, line 7, after 'provided', insert `maintained or safeguarded'.
No. 25, in page 10, line 26, after 'provided', insert `maintained or safeguarded'.
No. 28, in page 10, line 38, after 'provided', insert `maintained or safeguarded'.
No. 34, in page 11, line 47, after 'provided', insert `maintained or safeguarded'.

Mr. Williams: This group of amendments brings us to the heart of our disagreement with the Government on the strategy underlying their approach to the new regional policy. The Government seem almost to disdain the preservation of jobs. Of course we want to do all that we can to create jobs, but, particularly in a recession, the preservation of jobs is of equal significance, and we have argued consistently that the basic technical decisions taken by the Minister to exclude replacement investment and modernisation investment will make it more difficult to preserve existing jobs. We all know how difficult it is to bring new jobs into an area and to generate new jobs.
In view of the present astronomically high levels of unemployment in the assisted areas, it is astonishing that the Government should contemplate a reduction of £1,000 million in regional grant over the next five years. Moreover, that saving will be on only two headings. The

Minister of State said in Committee that of the £150 million to £200 million savings per annum about £105 million was to be saved on modernisation and £70 million on replacement. I appreciate that those are approximate figures. The Minister argued that the savings on replacement were required by the EEC, but we disputed that bitterly. As I made clear in Committee, when similar representations were made by the EEC in 1978–79 I refused to countenance them. For the major saving on modernisation, however, the Minister cannot claim EEC protection. As he admitted in Committee, those savings are required not by Brussels but by the Government. That proposal is a piece of innovative destruction of their own. The cut of £1,000 million over the next five years is just for starters. Here I take up the point made by my right hon. Friend the Member for Glasgow, Govan (Mr. Millan), which the Minister disputed. If the information given to the Committee by the Minister was correct and virtually the whole of the £200 million per year is to come from the elimination of replacement and modernisation investment, the £1,000 million saving in the next five years will be before any changes in dealing with new capital intensive investment, on which the Minister originally argued for savings and for which we all agreed that there might be some case. The £1,000 million is to be taken—or stolen—from the regions before the Government start on that and before any changes in the boundaries. The Government do not even have to cut the total assisted area map. They have only to cut the development and special development areas within it because regional development grants will no longer be available to the intermediate areas in any case — a matter about which we pressed the Government strongly in Committee. The £1,000 million will be taken from the regions before the Government make further savings on capital intensive investment, boundary changes or alterations in the rates of regional development grant.
The true cut in expenditure on regional policy will thus be massively greater than that stated by the Minister. The Minister seems to find that amusing. Perhaps that is because his constituency is not in an assisted area.

Mr. Norman Lamont: Cheap.

Mr. Williams: That is what the Government are trying to get — regional policy, unemployment and loss of industry on the cheap. Let no Conservative Member use that word when we are trying to defend the jobs of people in areas with 20 per cent. unemployment, most of it generated by the stupidities of the Conservatives' first "opportunity" Budget. Let us hear no more comments of that type from Ministers or we shall have to go into even greater detail about the way in which the Government have created the present ludicrous situation.
7.15 pm
In Committee, the Minister said that Labour Members were misty-eyed about manufacturing. The Government have frittered away manufacturing employment far more rapidly than any of our competitors. In a written answer on 27 February the Department of Employment admitted that for every 100 manufacturing jobs when the Government came to office only 77 remained by December last year. The Government had lost 23 out of every 100 jobs. The figure for France and Germany was 90. They had lost only 10. For Sweden it was 92. Only eight jobs per 100 had been lost. In Japan there were 103


jobs for every 100 in 1979. Having squandered the manufacturing base and manufacturing employment of this country in that fashion, the Government have the impudence to say that we are misty-eyed and to preach to us about economies and effectiveness in creating new jobs. We should not need so many new jobs if the Government had been as effective as our European competitors in preserving the jobs that existed when the Conservatives came to office.
The way in which the present situation has been created is clear when one considers what the Government have done to manufacturing investment. No doubt I shall be accused of being misty-eyed when I refer to the fact that at constant 1980 prices new investment in manufacturing in this country was running at £7,468,000 million when the Conservatives came to office. Within a year of their "opportunity" Budget that had been cut by £1,000 million. Within two years, it had been cut by £2,600 million. Within three years, it had been cut by £3,000 million and by the end of their fourth year the Government had cut it by £3,100 million. In other words, manufacturing investment has been cut by almost half since the Conservatives came to power. Yet they now accuse us of being misty-eyed and lecture us about efficiency in creating new jobs. What is the cost of their policies in redundancy payments, lost taxes and benefits paid out? The Government's entire revenue from the North sea has been squandered as a result of their economic stupidity in failing to sustain the employment that existed when they came to office.
The legislation now before us proposes to cut aid to the assisted areas still further just when it is most needed. Moreover, that was put forward before the proposal in the Budget to abandon capital allowances. In addition to the direct savings on regional grant, the Government intend to make massive savings on capital allowances to manufacturing industry in both assisted and non-assisted areas. That cut is beyond the £1,000 million in the next five years, beyond the economies to be made on new capital-intensive investment, beyond the savings to be made by altering boundaries and reducing the rates of assistance and beyond the £500 million that the Government have already cut from regional aid.
What are the prospects for people in the assisted areas? What hope have they of creating new employment or sustaining the employment that now exists when the Government's new regime comes into effect? In Committee, the Minister lectured us on the importance of firms meeting modernisation and replacement investment out of profits and not expecting ongoing subsidies. While I disagree with the Minister, I recognise the genuineness and strength of his opinion. However, I find it difficult to reconcile his fundamental doctrine that it is wrong for replacement and modernisation to be financed by grant and that it should be financed out of pocket with the Government's boast that under section 8 they are bringing in a special Government subsidy scheme for the textile industry to enable it to modernise. Why is it wrong to subsidise regional policy in one instance and right to subsidise it when it suits the Government's political requirements?
If it is so evil to have ongoing subsidies, how on earth can the Government continue with the experiment of enterprise zones? After all, an enterprise zone essentially

cuts down the running and overhead costs of businesses operating within the zone. It gives them a preferential advantage over businesses outside the zone — for example, they have their rates reduced. That is an operational subsidy. If it is wrong to have operational subsidies for regional policy in general, why is it right to have them for enterprise zones? There is a lack of integrity or of logic in the way that the Government are groping their way forward in their attempt to rediscover an economic policy.
In Committee the Minister hinted that he had grave doubts, and I took him to task on that. He said that a good case could be made for having no regional policy. I could well understand that he had to protect his shoulder blades — it was the gleam in his eye as he said it that suggested that he believed that. Implicit in what he is saying is that industry should be allowed to go to the south-east and should not be encouraged to go to the assisted areas with their wicked Government grants and subsidies. I ask him to read the speech made by the hon. Member for Berkshire, East (Mr. MacKay) on 17 May during the debate on the Whitsun Adjournment. He spoke for his Berkshire constituency and said that he did not want new jobs and new industry because all the nasty people who would come to work in the new industry would need houses, and that would spoil the green belt. He said:
that considerable commercial and residential development in the south-east, which is to the grave detriment of the environment in that area
is being encouraged as a result of the Government's current industrial policies. He continued:
It is no exaggeration to say that that community is being completely swamped
by the new housing needed for the people who man the new businesses being established. He said that his constituents would welcome an end to the nonsense of making it easier for the south-east to attract new industry, which is proving a great inconvenience. It might knock the property values a little.
As I tried to make clear to the Minister during Second Reading — I was singularly unsuccessful — regional policy is not simply assisted area policy; it is a policy for all the regions. If we fail in the assisted areas, there is a movement into the already congested areas of the south-east, leaving social problems and needs behind.
The hon. Member for Berkshire, East gave his view of the successful Conservative industrial policy. He said:
if this policy reaches its logical conclusion I can foresee the time when there will be one long urban sprawl from London to Reading and almost to Bristol, there will be no countryside in the south and presumably there will be industrial wastelands in the midlands and in the north."—[Official Report, 17 May 1984; Vol. 60, c. 591–3.]
I accept that the hon. Gentleman overstated the case, but there is a germ of truth in it. The logic of the Government's policy in cutting back help to assisted areas, and their refusal to recognise the need to preserve jobs and to modernise industry means that not only will new industry go to the south-east because of its locational advantages—especially in relation to the EEC—but that people will move to where the jobs might be. That will lead to depopulation in the assisted areas and to a concentration of population in areas that are already complaining that they are near to saturation point —especially in the London area that already has excessive strain on its social fabric.
The speech of the hon. Member for Berkshire, East was not unpleasant—he was genuine in expressing concern


on behalf of his constituents. He admitted that he had previously represented a seat in the Midlands and said that many of his former constituents would desperately like to have the jobs being steered to the south-east by Government policy. He portrayed the picture of a reluctant south-east receiving new industry, but what is happening elsewhere in the country? What is happening in the areas that will be robbed of £1,000 million during the next five years?
Since the Government took office, Wales has lost 83,000 jobs, which means an additional 83,000 unemployed people, yet it stands to lose £170 million in regional aid. In the north, there are 100,000 additional unemployed people, yet it stands to lose £180 million. In the north-west, 250,000 jobs have been lost, while it stands to lose £140 million. In Yorkshire and Humberside, 162,000 additional people are in the dole queues, while that area stands to lose £50 million. Scotland has 150,000 more unemployed and will lose £400 million. There are two contrasting pictures—the one portrayed by the hon. Member for Berkshire, East of the imposition of additional prosperity on already prosperous areas that are squealing at the burdens which that prosperity will create in social pressures and the picture showing the desperation and lack of hope in the many areas that will now be further deprived of a means to save themselves.
That is why we say to the Government that they are wrong to exclude modernisation and replacement from the proposed regional development grant scheme other than where it creates new jobs. Job preservation matters. If that had been given greater priority, many of the additional unemployed in the regions since the Government took office might not be unemployed today.
We move amendment No. 55 without the slightest hope of the Government seeing the need to respond to it. However, we move it because when the Government drafted the Bill it provided for the preservation of existing jobs. The Minister went out of his way in Committee to say that, although that was written into the Bill and was obviously in the Government's mind when they drafted it, in administrative terms they intend to ensure that the operation of new regional development grants is not what they envisaged. As I said, we have little hope and recognise that the Minister has literally written off prospects for Wales, Scotland, the north, the north-west, Yorkshire and Humberside and possibly even the west of England.

Mr. Peter Pike: I support amendment No. 55 because my constituency has suffered from the loss of jobs for many years. People there are seriously worried about the Government's proposal to cut regional assistance to industry further. Burnley lost out on assisted area status last year and, in north-east Lancashire, only one constituency—Rossendale and Darwen—has any form of assistance.
At the end of the first world war and in the early 1920s, Burnley was the largest cotton textile weaving town in the world. It was built on two industries—cotton and coal. Coal has gone—our last pit closed two years ago—and the textile industry has almost disappeared. Burnley had a population of well over 100,000 on the old county borough boundary and now, even on an extended boundary, we have a population of only 96,000. More than 40,000 people have left the area through lack of jobs.

Indeed, my mother moved from Burnley because of the slump in the 1930s. She eventually moved to London which is why, regrettably, I was born a Londoner and cannot claim to have been born in Burnley.
Burnley has always fought to attract new jobs because without them and the industry to provide them the town cannot survive. In the 1930s the borough council took a bold and illegal initiative. It built a factory which was taken over by the American company, Platers and Stampers, which became the Prestige Group which, in turn, has been taken over by Gallaghers, the tobacco people. It is still a major employer. The council has continued to take such initiatives to create jobs. Most of Burnley's jobs were created during the second world war and just afterwards. The biggest employer is Lucas Electrical and Lucas Aerospace. It moved to Burnley to avoid the bombing in the midlands. Burnley was fortunate in having few bombs dropped on it. Lucas was attracted to Burnley's hard-working people and has remained there. Firms such as Mullards and Michelin were attracted in the 1950s and 1960s.
I can speak from personal experience, as I worked in industry until June last year. I worked on the production line in a factory on continental shifts—changing shifts every three days. When I started working at Mullards 10 years ago it employed 3,500 workers but it now employs just over 1,000. It takes a lot of new industry to create work for those 2,500 people.
We lost assisted area status last year and we now have only an enterprise zone. When I was leader of the council, we decided despite political dogma that we had to take whatever we could get from the Government. We bid for a joint enterprise zone in which Rossendale, Hyndburn and Pendle are also involved. I believe it will prove one of the most successful enterprise zones in the country. It is the only assistance that we receive from the Government. I do not mean any disrespect to the Parliamentary Under-Secretary of State for Trade and Industry who represents the Rossendale and Darwen constituency, which has development area status, but I have always believed that north-east Lancashire is a whole and should work together. He will remember that when we met a previous Minister I argued for north-east Lancashire, not just for Burnley. When we recently relocated a Lucas factory—we did a deal to keep it in the Burnley area—it was surprising that about 30 per cent. of the workers in that factory lived in the Pendle constituency. North-east Lancashire is one and needs assisted area status. The only reason why unemployment in Burnley is no higher than 12.6 per cent.—that is by no means acceptable—is the fight that the borough council, the trade unions and industry in the town have put up. We do not owe any thanks to the Government. We hope that they will change their mind and accept this group of amendments.

Mr. O'Neill: This was one of the subjects that caused us most distress in Committee because we could identify a clear lack of understanding by the Government of the needs of the people who, in many respects, they like to think that they represent.
Business men in my part of Scotland and those in enterprises in which capital investment lies at the heart of industrial success are shaking their heads in disbelief at how the Government are approaching the issue. I was chided or perhaps kidded on by the Minister for moving from the Front Bench to the Back Benches but I shall make


a constituency speech in respect of my local authority. Nevertheless, I suspect that I represent the views of most people who are fortunate enough to have some interest in petrochemicals and allied industries.
In central region, coal and petroleum have accounted for some 53–1 per cent. of regional development grant and chemical and allied industries have received some 16–1 per cent. of the grant. Together, they account for about 64 per cent. of the money that was received between 1975 and 1983. The capital stock per employee at 1975 prices is some £45,000. We are therefore dealing with capital-intensive industries and firms such as BP and ICI.
We had the spectacle of the Secretary of State for Scotland coming to the central belt last year and proclaiming in Grangemouth, with some justification, the importance of the role played by the Government—it must be said, cajoled and encouraged by the local Members of Parliament—and the support that was given to those firms so that they might take advantage of North sea oil development. We welcomed what was, apart from Moss Morran, the major investment on the mainland of Scotland in North sea oil.
Although the Scottish Nationalist and separatist element in Scottish politics has been reduced considerably —my main opponent at the last election was a Scottish Nationalist, as was my opponent at the previous election when I unseated the then SNP Member for the constituency—we are conscious of the fallacious claims being made for "Scottish oil". Nevertheless, the political responsibility of people who justify the existence of the United Kingdom must be to see that there are opportunities to be grasped by the United Kingdom Government to support the regions of Scotland and the nation of Scotland, and we have to make it clear that tangible evidence of the support for Scottish industry was given by United Kingdom Governments in the form of investment to oil-related industries in the Grangemouth area, which my constituency abuts.
If these amendments are not accepted, we believe that the prospects for further investment could be greatly undermined. Unless there is some degree of certainty in the minds of companies, they will not look kindly at the United Kingdom and they will choose options elsewhere. Although British Petroleum has a very creditable record in backing and supporting Britain, the company could just as easily be called World Petroleum. What is more, BP Chemicals could be seen to be European Chemicals. It is capable of moving quite freely from the mainland of the United Kingdom to the mainland of Europe.
We are worried, as the company is aware. It gave us some information during the course of the Committee stage. We made representations to the Government then but, frankly, they fell on deaf ears. In the highly competitive international industry that petrochemicals is, it is essential to have a degree of support for programmes of capital investment which go through as smoothly and as quickly as possible.
The nods and winks that Ministers may offer us about selective assistance going through without any measure of selectivity in the case of certain industries does not impress us. We recognise that on occasions there will be pressures within Departments in respect of the Budget. The arguments behind the Government's regional policy are as

much as any to save money. If resources are at a premium, they will be subject to the strains that are always present if selectivity is one of the criteria that have to be applied.
In some instances the maintenance of jobs is pitched at the very modest objective of ensuring the minimum loss of jobs. We know that on occasions jobs have to be lost as a result of capital investment projects. I take an example which is far more modest in Scotland than those of BP and ICI. In my constituency there is a brewery that employs some 250 people. The brewery is going through a reorganisation, and part of the reorganisation will involve the re-equipping of the keg-filling operation. I realise, Mr. Deputy Speaker, that you may not be that well acquainted with the consumption of alcohol, but I am sure that you know about the mechanics of its production. It can be a costly business, and the reorganisation is part of a trade-off for a number of redundancies. The sweetener to the local work force is the prospect that there will be capital investment.
There is no guarantee that the capital investment will go forward unless there is a measure of Government support. It is designed to defend a work force which will be reduced by some 25 per cent. Historically, the town of Alloa is one of the brewing centres of the United Kingdom. It produces products that are enjoyed throughout the country. However, a large brewing corporation such as Allied Breweries can pick and choose and in many instances is concerned not so much with the quality of the ale that it sells as with the ease with which it can distribute it to pubs and other licensed premises across the country.
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We are under no illusions that to ensure employment in that area we need more than a vague indication of sympathy from the Department of Trade and Industry or the Scottish Office. The amendment is necessary if only to ensure that capital-intensive industries on which large parts of the country still depend for employment have a future and can be defended in such a way as to give a degree of confidence to the accountants and planners when they are laying their schemes for future investment. It would be unfortunate if chances were lost simply because of bureaucratic delay and the like.
We realise from our discussions earlier today that the Minister claims to have an open mind on the matter and that there are still areas where the consultative process can have some effect. I should like to think that the Parliamentary Under-Secretary of State would say whether he was likely to look sympathetically at particular industries, identify them and then say that they were industries that either were worthy of exemption from the regulations or could be given a special status similar to that of the textile industry. In our view, there are other industries that merit the kind of support that they have enjoyed in the past. They have creditable performance records. They have highly skilled work forces, and it is essential to keep these teams together. The idea that a team of research scientists can collectively get on some enormous bicycle and travel to another part of the country to start working for the benefit of another firm is misguided, to say the least.
We know for a fact that the teams in the petrochemical industry and the like are being subjected to a considerable degree of anxiety. They do not know whether the process of contraction which they have undergone over the past


three or four years will continue. If it continues, they are not sure whether it will mean their moving to other parts of the United Kingdom fortunate enough to enjoy some form of development area status or whether they will have to go to other parts of Europe. If that is the result, it will be at great cost to the country in that we have spent considerable sums on their education, training and development. In respect of the younger members of these teams, the nation has never had a return on its investment.
Even if the Minister cannot accept the amendment tonight—we are realistic enough to assume that he will not—he could give us hope for certain industries along with the textile industry. I am not churlish enough to suggest that it is simply because the Minister represents a textile constituency that the Government are honouring such a scheme. There are in Britain companies that have been chided in the past. There have been arguments about whether some of the North sea developments that attracted considerable sums in the past should have received them. We are not talking about punishing firms for taking advantage of previous regional assistance schemes. In many instances firms are completely separate divisions of large corporations, which operate on their own as separate profit centres. In many instances there is little evidence that the benefits derived by one division were necessarily transferred to the divisions that would be penalised if the new regulations were brought to bear.
I ask the Minister to look at the matter again. I hope that he will give some sign tonight that he is prepared to change tack and say that certain categories of industry could be identified and exempted from what is a simplistic and crude measure which, at the end of the day, will be detrimental to a section of British industry that has served the country so well in the past.

Mr. Alton: We on the alliance Benches will support these amendments tonight, for the same reasons as I did so in Committee. It is not right, in the world in which we live today, to follow fashionable trends and suddenly write off whole sections of British industry purely because there has been a lurch from high stack to high tech industries; to write off vast chunks of industry as being sunset industries and, because the pendulum has shifted, to put resources into sunrise industries. British industry has been penalised because of such violent shifts and fashionable trends.
Much of manufacturing industry, the one fifth of it that has been lost over the past few years, could have been saved if action had been taken early enough and resources had been put into firms which might have been able to survive the recession, as has happened in so many other countries. As the right hon. Member for Swansea, West (Mr. Williams) said, the decline in manufacturing industry in other countries has not been as great as in Britain. That is often because preventive action has been taken by Governments to safeguard and protect their manufacturing base.
The right hon. Gentleman also alluded to the knock-on effects that regional development and assisted area policies can have. He mentioned enterprise zones. It is ludicrous for the Minister to imply, as he did earlier—I am not sure whether it is a view shared by the Parliamentary Under-Secretary —that in some way we can dispense with regional policy, that it might now be a luxury which we can afford to do without. The logic of the enterprise zone policy is similar to that of the assisted area

and regional development policies. It is discrimination in favour of areas which are particularly disadvantaged. If it is right to try to involve the private sector in hard-bitten parts of Salford or Merseyside, it is certainly right to have public funding through regional development policies.
The right hon. Gentleman also mentioned discrimination in favour of some parts of the country through natural circumstances and advantages of geography. He mentioned Berkshire. It is worth reiterating that "Heseltown"—as it is known in Berkshire—has sprung up because Berkshire has the geographic advantage of being west of London. It is in a good position for airports, trading, markets and everything else, but many people in that part of the world are horrified at the massive developments taking place there and the effect of this discrimination in favour of the south-east. It is not that there are not disadvantaged parts of the south-east, but in that particular area people are genuinely horrified at seeing green belt eaten into and the massive developments in those districts when other parts are becoming deserts. It is clear that the 100,000 people whom the city of Liverpool has lost in the past decade are moving to places which do not need the new developments. Instead of allowing the centres of Liverpool, Manchester and the great conurbations of the north to wither on the vine, it would have been far better to put resources into such areas years ago and prevented that massive shift of population. Successive Governments failed to do that, but it is not too late.
Instead of promoting a nation of Dick Whittingtons, where people are encouraged to go in search of their fortunes to the south-east or the pleasant climes of Berkshire to earn a living, it would be much more advantageous to put resources into areas such as Merseyside and Greater Manchester to ensure that work and people stay in those areas. A failure to do that will result in many other knock-on problems and effects. Liverpool is the classic example. The loss of 100,000 people has meant the loss of ratepayers and subsequently the rate support grant. It has left an ageing population, because inevitably those who leave are white collar and skilled workers. It means that the fastest-growing group in that area is that of the over-80-year-olds. It means that one of the largest groups there is composed of people over retirement age—one quarter of the population. It means that as families leave, schools and the desks in those schools become depopulated, All that happens as a result of the failure to put regional development grants into those areas.
It would be wrong for the Minister to go too far down the road of believing that regional development grants are some sort of luxury which we can dispense with. Just as the logic of enterprise zones, for which he has argued, dictates that disadvantaged areas are discriminated in favour of, surely the logic of regional development grants is that they should do precisely the same. It should not just be about service industries and new high-tech industries, important as they are. It must also be about preserving our industrial base. It should be about preserving our existing manufacturing industry. There is nothing more closed than a closed factory. The chances of getting it reopened are negligible.
If one lives, as I do, in an area where factory after factory has closed, it is extremely disillusioning. It makes one cynical and bitter about the way in which successive Governments have washed their hands of the problems of


such areas and allowed deindustrialisation and decline, without putting anything in their place. To see street after street of deserted factories, and to see industries closed down which might have been saved, is a debilitating process. I am convinced that many of those factories could have been saved if resources had been put at their disposal. The cost of leaving people on the dole queue, creating vacant factories and allowing companies to close down is phenomenal.
I spoke earlier about the effects on family life and about the young people who are becoming heroin addicts. In places such as Liverpool the problems have reached epidemic proportions. It is no coincidence that most of those affected are young unemployed people who are hanging around on street corners with nothing to do and nowhere to go. The sad truth is that the devil will always make mischief for idle hands. It is not just the drug pushers who lure those people into drug addiction; it is the criminals as well who lure them into street crimes such as muggings, burglaries, and so on. The cost in economic terms is phenomenal. As I understand it from the Treasury, the cost of keeping people on the dole is more than £17 billion a year. There is the cost of unemployment benefit, social security and the loss of tax which people would otherwise be paying. That is too high a price to pay.
The Government should not neglect the problems of manufacturing industries. The companies which have been closing down throughout the whole of the north-west will be followed by others unless there is a robust regional policy pumping money into the manufacturing industries to keep them buoyant, to help them see out these difficult economic times and to ensure that they can weather the recession. If the Government fail to do that they will simply help to create more urban dereliction and decay, and ensure that more people are added to the dole queues. They will wreck more family lives, create more disillusionment among young people and undoubtedly create the kind of militancy to which I have referred.

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Mr. Fallon: I apologise to the right hon. Member for Swansea, West (Mr. Williams) for having had to leave the Chamber at the beginning of his speech. A similar debate took place in Committee. It may be that the right hon. Member deployed some of the arguments that are familiar to a number of hon. Members. If not, I will check tomorrow.
There is still a great deal of misunderstanding on the Opposition Benches of the true nature of the Bill, even by Opposition Members who served on the Committee. Talk of a violent shift in emphasis in regional aid money is wide of the mark. What occurred before —and one can observe it clearly in the north-east—was that regional aid resources discriminated heavily in favour of capital-intensive investment. The Bill seeks not to reverse that discrimination, in other words, to discriminate only in favour of labour-intensive investment, but to remove that discrimination so that regional aid, at least in terms of the regional development grants, is broadly neutral in its effect on capital-intensive investment and labour-intensive investment. Labour Members make pretty poor defenders of labour, or jobs, at the best of times, but they make even poorer defenders of capitalism.
In seeking to insert the word "preservation" into the Bill, the Opposition seem to want to perpetuate the discrimination that existed against labour-intensive investment and to exclude the United Kingdom from qualifying for European regional development money, because that is one of the objects of the changes made in the Bill.

Mr. Williams: The hon. Gentleman said that Opposition Members seem not to have understood the nature of the Bill, despite having served on the Committee. I realise that he was absent when I made my opening comments and I understand why. I draw to his attention that I said that the £200 million a year that is being saved under the Bill is before, and not as a result of, any savings that are made in relation to capital-intensive industries. It is purely on replacement and modernisation, according to the figures that the Minister gave in Committee.

Mr. Fallon: I should have thought that that was capital-intensive. Modernisation investment alone does not create new jobs. That is precisely the sort of capital-intensive investment that I should have thought regional aid money wrongly discriminated in favour of in the past.
In seeking to insert the word "preservation" into the Bill, the Opposition seem to want to exclude the United Kingdom from any hope of qualifying for regional development money because there will not be a sufficient element of job creation in the Bill. The Opposition seem to wish to exclude those who are designing or hoping to design projects of purely replacement investment from applying for regional development grant money. By seeking to insert the word "preservation", the Opposition repeat the mistake of the late 1960s and 1970s of trying to preserve jobs at too high a cost to jobs elsewhere.

Mr. Dixon: I assure the hon. Member for Darlington (Mr. Fallon) that no Opposition Member doubts the motive of the Bill, which is primarily to cut regional aid. I believe, like my right hon. Friend the Member for Swansea, West (Mr. Williams), that the preservation of jobs is as essential and important as the creation of jobs.
One of the largest employers in my constituency, NEI Reyrolles, which deals with the power industry, requires work refurbishing power stations. When I met Sir Walter Marshall, the chairman of the Central Electricity Generating Board, he told me that all power stations are due to be refurbished at the end of the century. There is a trough now, and there will be a peak at the end of the century. The only unfortunate will be the power industry when the power stations require refurbishing.
This debate is concerned with trying to preserve jobs. For any hon. Member who comes from the northern region, especially those Members representing constituencies in the northern region, to contemplate a cut in regional grant, bearing in mind the unemployment rate, is nothing short of criminal. We are discussing heavy industry and manufacturing industry in the north of England where 25 per cent. of the male work force in manufacturing industry works in heavy engineering, mining, shipbuilding and so on. The percentage in the rest of the country is 8 per cent. That is one reason why the amendments are important.
As to the unemployment situation, I asked a question of the Minister in December last year. Over 92,000 of the unemployed in the northern region are long-term unemployed, and have been unemployed for over 12


months. I do not know what it is like to be unemployed for over 12 months; indeed, I do not know whether any hon. Member knows what that is like. However, I know what it is like to be unemployed for over four months, because I have been unemployed for over four months.
My right hon.Friend the Member for Swansea, West and the hon. Member for Liverpool, Mossley Hill (Mr. Alton) were right when they referred to breaking up communities. My right hon. Friend said that unless there is a regional policy, and employment is provided where people live, the nation will be turned into a nation of industrial nomads. The young and active members of the community will leave the area to look for work which will result in a disproportionate population made up of the old and infirm in hostels and old people's homes.
This all turns on regional policy. I know a little about regional policy because regional policy was introduced in this country after 1936 when 200 men marched from Jarrow. That is when central Government started taking notice of the regions, and when the people in the south in their ivory towers realised that the people in the northern region were living on the bread line, and 74 per cent. of the population were unemployed. That is when the Government introduced regional policy. We should be improving regional policy, and not cutting it back, which is what has happened since the Government were elected in 1979. This Government introduced the first Industry Act in 1979 when they cut regional aid. On every occasion that they have introduced such a Bill the intention has been primarily to cut aid to the regions. The share of public spending on the regions granted to the north from 1979 to 1982 has dropped from 6·31 per cent. to 6·18 per cent. That is what has happened in the northern region during a period in which unemployment has gone sky-high.
It is nonsense to suggest that a switch from manufacturing industries to service industries will create jobs because service industries are labour-intensive, while at the same time another Department is cutting back on local authorities, which include the largest labour-intensive service industries in the country. It is nonsense for the Government to talk about switching regional aid from manufacturing industries to service industries to create more jobs when the Secretary of State for the Environment is cutting back on local authorities and having to pay off home helps, school caretakers and so on. In the district covered by my constituency the population has fallen from 177,000 in 1971 to 160,000 today. The bulk of that fall is accounted for by the young people who have left the area looking for jobs. The vast majority of them were young and active people who paid rates which helped to look after their families and the old people.
Communities are being broken up. One of the reasons for the current strike in the mining industry is that the mineworkers in the country are not prepared to sell their jobs or break up the communities in which they have lived all their lives. That is what lies behind the amendments. There is no effective regional policy, and that is what the Bill is all about. The preservation of jobs is as important as the creation of jobs. In the northern region we want to preserve jobs in shipbuilding, heavy engineering and other industries.

Mr. Millan: I apologise for missing the start of the debate, but one of the amendments under discussion is in my name. I did not understand what the hon. Member for Darlington (Mr. Fallon) said about amendment No. 55

because it deals with the preservation of jobs and has nothing to do with spending money on capital as distinct from job-creating projects. It relates specifically to the preservation of jobs.
The amendment also relates to the preservation of existing industry. No one believes that every bit of existing industry can be preserved for all time. The Labour party has never made that claim. Everyone wants new and modernised industry to move to the development areas.
Many people in Scotland devote time to modernisation. One swims against the tide if,, in creating a limited number of new jobs, one makes existing employment disappear. The story in Scotland, and in other areas in the last few years, is that jobs are disappearing faster than they are being created. That is why it is essential that as well as creating new jobs we do everything possible to preserve existing jobs. With greater Government effort, that could have been done in many cases in my area over the last few years, but jobs were lost because of misguided economic and industrial policies. The general economic climate has destroyed our industrial and manufacturing industry.
The amendment is specific in that it says that we should be concerned about not only the creation of new jobs, but the preservation of existing jobs. I regret that we are not also discussing amendment No. 11 about the modernisation of existing capacity, but it has not been selected, although I shall make a passing reference to it. I am disturbed about paragraph 19 of the White Paper which refers to replacement investment. We shall deal with the EEC aspect later.
The general proposition is that if replacement investment only is involved no assistance will be given. Little straight replacement investment takes place. Such investment always includes an element of modernisation. It if does not, there is no point in replacement investment. Under the Bill assistance for a project excludes investment in modernisation. Replacement or modernisation does not necessarily create or expand existing productive capacity. However, without replacement and modernisation productive capacity will disappear. Unless a firm keeps up to date with machinery—although that sometimes means fewer jobs—jobs will disappear completely. That choice sometimes has to be made. Such modernisation is excluded from the Bill. If I have misunderstood the Bill, I hope that the Minister will reassure me.
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Those of us who are concerned not only with preserving what we have in manufacturing capacity, but with ensuring that industries become more efficient and modernised, are discouraged by the specific exclusion in the Bill.
My amendment No. 17 deals with another qualification and another power in the Secretary of State's hands—the power to decide that a particular project that might otherwise qualify for assistance may not so qualify because it may have a detrimental effect on some other existing capacity in another development area. For example, a new project in the north of England might have a detrimental effect on existing capacity in the north of Scotland.
If we applied that test to the enterprise zones, there would be no enterprise zones. Studies demonstrate that enterprise zones simply shift expansion from one area to


another a few miles down the road. I am sceptical about enterprise zones in general, but the areas which are so designated are attracted by them.
Hardly any project, however admirable, will not have detrimental effects on some other existing project somewhere else. I do not know how Ministers will judge, but they could exclude worthwhile projects. Another element of uncertainty is being added to a system that is already uncertain and will become more so. The new system will be much less effective. All representations from Scotland have made that point. Certainty is important. Under the Bill the Secretary of State is given powers to do this, that and the other. That will lead to massive uncertainty. The prospect of Government assistance will, therefore, be taken less and less into account when investors decide where to invest. That must be bad for regional development.
I understand the thinking behind the words in the Bill, but they are dangerous words. If they mean anything, in practice they will kill off many worthwhile projects. Almost no new project can be said to have no detrimental effect on an existing project. For example, there was controversy a couple of years ago about Caithness Glass which built a new factory near Perth to supplement a factory in the north of Scotland. Existing glass manufacturers in the Perth area argued that that project would damage their ability to operate in that market. I do not believe that that argument was valid, but it demonstrates how a successful project could have been prevented from going ahead by having assistance removed through this sort of provision. I hope that the Minister will say something about that when he replies to the more general points.

Mr. Trippier: When one looks at amendments such as these, one wonders whether the Opposition's concept of job preservation is the engagement of civil servants and possibly Ministers to consider unnecessary changes to legislation. If we consider amendments Nos. 55 and 56, we realise that they do no more than is achieved by the Bill. They make it clear that grant can be paid in respect of safeguarded or maintained employment. The Bill provides for that. Our policy is to pay grant only in respect of job creation. The amendments make no impact at all on that policy.
We do not undervalue the need for modernisation. Many special schemes are designed for that purpose. The right hon. Member for Swansea, West (Mr. Williams) referred to only one of them. We do not intend to exclude modernisation from regional policy. Where it creates jobs it will be eligible for RDG. Where it safeguards or maintains jobs it will be eligible for regional selective assistance. Modernisation projects which do not create jobs will not receive RDG except usually in the case of small firms, although the Bill provides for that if it is desired at some future stage.

Mr. Milian: The Minister says that provision is made somewhere for this to be done if it is necessary. Where is that provision?

Mr. Trippier: It is in both the White Paper and the Bill. I do not want to rehearse the arguments, as we went through them in detail in Standing Committee.

Mr. Milan: If the Parliamentary Under-Secretary went through them in such detail in Standing Committee, no doubt he can put his finger on the provision and tell us where it is.

Mr. Trippier: I shall find it in a moment and give the right hon. Gentleman a detailed reply.
Where modernisation safeguards or maintains jobs it will be eligible for regional selective assistance, but modernisation projects which do not create jobs, except normally for small firms, will not receive RDG, although the Bill provides for it.
Non-job-creating modernisation is to be excluded from RDG, for two reasons. First, our priority is to create jobs and, secondly, the measurement of safeguarded and maintained employment is selective and is inconsistent with an automatic scheme. We are excluding replacement investment completely, but not simply because the European Commission prohibits it. I do not believe that the right hon. Member for Swansea, West could have continued to resist it even had he remained in office. We exclude such investment because it would, by and large, go ahead without assistance and does not create jobs.
The right hon. Gentleman and some of his hon. Friends have already touched on the difficulty already faced by the Government — I am prepared to admit it —over the difference between replacement and modernisation, and how we shall overcome it. I shall try to answer that. None except small firms, which will probably be defined as enterprises employing fewer than 200 people, will receive grant unless they create jobs anyway. That is because the cost-per-job ceiling means, for all but the small firms, that if jobs are not created grant will not be paid. The difficulty of telling replacement and modernisation apart will arise only for small firms. I agree that it will be difficult in their case.
We shall define replacement broadly as the mere piecemeal renewal of assets to carry out the same or similar tasks as before. We shall spell that out in our notes for applicants, making it clear that for a project to be eligible for grant it must create new, or expand existing, productive capacity, or effect a material change in the product or process.
Applicants will be asked to state in their application that they believe their project is eligible on that basis. Officials will examine applications to see whether the project details confirm that. There will also be some follow-up inspections. We shall publish as clear a guide as we can to make it clear to everyone how we will interpret the rules on eligibility, so that applicants know exactly where they stand.

Mr. Geoffrey Robinson: The Parliamentary-Under Secretary must realise that we are still in some difficulty over precisely what he is saying. It is as clear as mud to Opposition Members. Is he saying that if an investment creates productive investment or expands productive capacity, irrespective of the jobs created, lost or maintained, it will be eligible for RDG? That is what he has just said.

Mr. Trippier: I said that it will not be eligible for RDG if it does not create jobs. the hon. Gentleman should listen more careully. I have already explained twice that we are referring only to small firms in relation to this matter. I refer the hon. Gentleman to the White Paper—

Mr. Milan: rose—

Mr. Trippier: May I first refer the right hon. Gentleman to annexe B at page 15, item 5 of the White Paper. [Interruption.] I should like to reply to the right hon. Gentleman.

Mr. Milian: rose—

Mr. Geoffrey Robinson: On a point of order, Mr. Speaker. Is it in order for the Parliamentary Under-Secretary to reply to a debate on a matter which the Minister of State dealt with throughout the Committee proceedings, and to whom he now must refer? Is it in order for the hon. Gentleman to continue to talk about the White Paper when an Opposition Member asks him to quote something which he claims to be in the Bill? We are discussing the Bill, as amended in Committee.

Mr. Deputy Speaker: Order. The hon. Gentleman knows that that is a matter for debate, not a point of order.

Mr. Trippier: When I was referring to small firms and the difficulties which the Government would have in differentiating between replacement and modernisation I said that it would be difficult, but that a project must create new or expand existing productive capacity. That is my answer to the point raised by the right hon. Gentleman. When the firm is not small—we are considering the definition of a small firm for the purposes of this legislation-we would say that modernisation does not arise unless it creates new jobs. The problem does not arise anyway, so there is no argument about the matter. I have already defined the criteria to be applied to small firms employing 200 people or fewer.

Mr. Milian: We must get the point cleared up. The Minister told us that there was a reference in the Bill to modernisation. I asked him to tell me where it was. He has not been able to tell the House. We asked for the reference to small firms in the Bill, but there is none. We are well aware of the reference to small firms in the White Paper. We do not need the Minister to tell us that. Can he tell us how that will be provided for in the Bill? That is all that we are asking of him.

Mr. Trippier: The basic criteria for a project are in new section 3. They do not exclude modernisation.

Mr. Milan: The Minister says that the Bill does not exclude modernisation. That is slightly different from what he was saying a moment ago—that modernisation is included. It might have been much easier, Mr. Deputy Speaker, if the amendment that I tabled to insert the word, "modernisation" had been taken with this group of amendments. I have considered new section 3 on page 8 of the Bill. It does not refer to modernisation. We must assume, therefore, that that is excluded. If that is not so, can the Parliamentary Under-Secretary tell us where the concept of modernisation comes in, given that he has already told us that replacement expenditure will not be eligible? Will he also tell us where the small firms provision will be dealt with?

Mr. Trippier: The small firms provision to which I have referred thus far is for those which are exempt from the cost-per-job-limit and which are involved with the modernisation proposals anyway. That is an important point. The right hon. Gentleman is concerned about small firms. We are aware that the European Commission does not allow replacement investment. It allows modernisation. I have already gone to some trouble to define that.

The question of replacement investment does not arise because that is not allowed by the European Commission. [Interruption.] It is not allowed. In any event, that does not arise in the context of these amendments, because there is no problem for companies which employ more than 200 people. If the numbers of jobs increased, there would not be any assistance in the form of regional development grants anyway.

Mr. Milian: That is all very interesting, but I should like to return to the subject of modernisation. The Minister says that that is included in the Bill, but he is the only person who is able to see it there. However, he is apparently unable to tell us where it appears. I tabled amendment No. 11, which would insert the words "or modernise". It has not been selected, but as the Minister seems to think that it would be a good idea to include that concept in the Bill, will you accept a manuscript amendment, Mr. Deputy Speaker? It would appear that the Minister must be willing to accept such an amendment. It would seem to be an oversight that the concept is not in the Bill, as he obviously intended it to be included.

Mr. Deputy Speaker: I am sorry, but I cannot help the right hon. Gentleman. His amendment was not selected because it was out of order.

Mr. Trippier: I have to say—

Mr. Milian: On a point of order, Mr. Deputy Speaker. Can you explain why my amendment was out of order?

Mr. Deputy Speaker: The right hon. Gentleman knows very well that the selection of amendments is not a matter for debate. I was trying to help him and the House when I explained why his amendment was not selected. However, the right hon. Gentleman knows perfectly well that it is not possible for the Chair to argue the toss over the selection of amendments.

Mr. Milian: Further to that point of order, Mr. Deputy Speaker. I am not arguing about the selection of the amendments. I was just interested to know why my amendment was out of order when, according to the Minister, the concept is already covered in the Bill.

Mr. Deputy Speaker: I allowed the right hon. Gentleman to refer to an amendment that had not been selected because it seemed appropriate given the argument that he was making. However, we cannot argue about those amendments that have been selected and those that have not.

Mr. Trippier: I am anxious to be as helpful as possible to the right hon. Gentleman. We are obviously going to some pains to identify where the matter is mentioned in the Bill. However, the right hon. Gentleman must be right and I shall not argue with him. The word "modernisation" is not in the Bill. However, I understand that it does not need to be in it, as non-job-creating modernisation is to be excluded by the cost per job limit, except for small firms.

Mr. Pike: Perhaps the Minister can let me know whether I have understood the position correctly. Is it true that if modernisation did not create any jobs in an industry that employed more than 200 people, but nevertheless meant that the firm could maintain its competitiveness and its present number of employees, it would not be eligible for any grant or assistance? If so, that industry could collapse as a result of the Government's failure to assist.

Mr. Trippier: That is completely wrong. Those companies that apply for assistance when they are only going to maintain or preserve existing jobs will come under section 7. On Second Reading and in Committee we said that we had moved assistance for preserving jobs away from the automaticity and predictability of regional development grants to section 7 regional selective assistance.

Mr. Williams: A company which employed 198 people and which intended to expand would presumably qualify for modernisation grant, yet if it expanded and employed 210 people it would presumably be too big to qualify for it. Would it get the grant?

Mr. Trippier: At this stage it is rather too early for us to determine whether the figure is to be 200. The right hon. Gentleman must not draw me out too much on that point. If the Government decided that the qualification for a small firm was the figure of 200, the company which the right hon. Gentleman mentioned would be eligible.
It has been said that the amendments strike at the heart of the whole strategy. I have touched on the difference between us, which is quite considerable. However, several Opposition Members obviously did not understand that we were moving the criteria for preserving existing jobs over to section 7 and away from regional development grants. Nevertheless, I cannot see how the right hon. Member for Swansea, West can predict that there will be considerable cuts over and above the references made to between £150 million and £200 million when we do not know what the effect will be of extending assistance to the service sector. We do not yet know what the effect of that will be. That is the truth.
How can the right hon. Gentleman say that the cuts will be considerable when we know that 80 per cent. of all regional assistance claimed is claimed by small firms, using the Bolton definition of 1971, that is, those firms which employ 200 people or fewer? We do not know how the finance will be affected by the exemption which they will enjoy under the cost-per-job-ceiling. Thus, there are two things there that we do not know. The right hon. Gentleman has given the House only pure hypothesis, not fact.

Mr. Williams: The Minister has accused me of hypothesis, which is a terrible allergy for a Member of Parliament to have. How can the hon. Gentleman deny that a considerably larger sum would be "saved" when. according to the Minister, that money is saved by the Bill entirely as a result of excluding modernisation and replacement, and before provision is made for dealing with the capital intensive sectors of the industry, even when it creates new jobs?

Mr. Trippier: How can I possibly deny or agree with it? Two imponderables have to be taken into consideration: the fact that small firms will be exempt from the cost-per-job-ceiling, and the fact that we are extending support to the service sector. Those are both very important factors and at this stage we are not in a position to give finite figures.

Mr. Williams: I accept that, but does the Minister agree that the £200 million results purely from the exclusion of modernisation and replacement, and so does not take account of the savings which the Government

boasted on Second Reading would be made by the exclusion of capital-intensive projects? That will therefore make the cutback far greater.

Mr. Trippier: The simple answer is yes. However, I have not mentioned a third factor which we are not yet sure of. Indeed, the right hon. Gentleman and his colleagues are not sure of it either. We are moving regional assistance from regional development grants to section 7 regional selective assistance for those companies which preserve their work forces. At this stage we have no idea how much money will have to be spent under section 7. That is another matter that tends to cloud the issue. However, we are not prepared to accept that the cuts will be considerable at this stage, because we do not know.
The hon. Member for Burnley (Mr. Pike) represents a constituency that borders mine. I had always thought that, like me, he was one of those hon. Members who did not have to change his money at Watford. However, he very courageously told us that today that he was born in London and did not have the privilege, unlike some of us, of being born in the finest county that God ever gave to man. Nevertheless, I welcomed some of his comments, and the fact that the enterprise zone in his area is successful. I suspect that the one in my constituency will also be successful. He mentioned that my constituency was assisted, but the truth is that half of it is assisted. He will probably recall that, having got Darwen as well at the last election. I need hardly remind him that at time development area assistance was given to my constituency, when unemployment stood at about 19·1 per cent. and there was an over-dependence on the two traditional industries of textiles and footwear. I am delighted to say that as a result of the concentration on smaller firms, which has diversified industry away from those two traditional industries, unemployment has dropped by one third, to 12·4 per cent., which represents an enormous success. I am well aware that that unemployment level is below that of the travel-to-work area which covers Burnley. I have no doubt that the hon. Gentleman will be leading a delegation to the Department, and we look forward to seeing him then.
The hon. Member for Clackmannan (Mr. O'Neill) referred to sectoral support. The simple answer to his question—whether there should be exemption for certain industries from some rules in the Bill—is "No, Sir." I was glad that he was not churlish enough to mention that the textile and footwear scheme had been introduced simply because there were textile and footwear interests in my constituency.
The hon. Member for Liverpool, Mossley Hill (Mr. Alton) said that manufacturing would not have diminished in the way that it had if the Government had in the past bolstered it up. His remarks surprised me because in recent times there has been no sub-region of the country more assisted than Liverpool.

Mr. Alton: There are many people in Liverpool who would disagree with that. Given the scale of the problems there, the sort of assistance that the Minister has been arguing has been so effective in Rossendale is precisely the assistance that I should like for parts of my constituency.

Mr. Trippier: I refer the hon. Gentleman to an Adjournment debate initiated by the hon. Member for Liverpool, Riverside (Mr. Parry) about two months ago, to which I replied, on the closure of British American


Tobacco plc. On that occasion I gave the figures and proved that Liverpool as a sub-region was the most assisted. How much more assistance can that area be given? The hon. Gentleman must consider what effect all that assistance has had, bearing in mind that it is a special development area.
I may be going back 15, 25 years or more, but if companies had reinvested their profits and modernised perhaps they could have been more competitive and would have survived better than they have. Although that is a rather different point, it is wholly in line with what the Government are trying to do by introducing this legislation, for we are in favour of modernisation in that it creates jobs.

Mr. Alton: Earlier in our proceedings I put to the Minister the fact that a company such as United Biscuits, an organisation making a profit of over £80 million this year, in having to choose between five different factories, decided to close down the one on Merseyside. Another example occurred only last week, when BUPA—a most successful organisation which I am sure the Minister supports—though making phenomenal profits, decided to rationalise, and one of the three offices it decided to close was in Liverpool.
I asked earlier what steps the Government could take to try to persuade successful companies making large profits, whether in the manufacturing or service sectors, to stay in an area such as Merseyside.

Mr. Trippier: I recall speaking in the debate to which I referred, on the closure of BAT, Liverpool. It was clear that that company had to cut down its operations, not only in Liverpool but elsewhere, because people were smoking less. Nabisco, which has taken over Associated Biscuits in Liverpool, is in the Crosby area. When I spoke recently on that subject I pointed to the fact—this may sound somewhat simplistic — that people were eating fewer biscuits. There are certain difficulties which the Government cannot tackle, and the fact that people are eating fewer biscuits is one of them.

I agreed with: my hon. Friend the Member for Darlington (Mr. Fallon) when he said that hon. Members, including—dare I say it? —the hon. Member for Jarrow (Mr. Dixon), had not listened to what the Government had said about the Bill. That hon. Gentleman may now be in a better position to understand that, in relation to the preservation of jobs, we have moved that aspect over to section 7. I assure him that we are in no way discriminating against manufacturing industry. We are saying that we shall no longer discriminate against the service sector, and that has been widely welcomed on all fronts.
When the Secretary of State announced the publication of the White Paper "Regional Industrial Development" to the House in December last year, he made it clear that we intended to net off jobs lost in any assisted area as a direct result of a project against jobs created. Thus, if a project creates 10 jobs in a development area but that project means the direct loss of 10 jobs in another—or, indeed, in the same development area — the project will be treated as not having created any new jobs. If jobs are merely transferred within a development area, or from one development area to another, or if jobs are created in one

development area but are lost: in another, or in the same development area, I cannot see any justification for treating the project in question as creating jobs.
Development areas have roughly the same degree of need as one another. Regional policy is concerned in some sense with transferring jobs, but it does not make any sense to pay grant on jobs which are merely transferred from one area of need to another area of similar need.

Mr. Millan: How will civil servants have the omniscience to know, if an electronics firm sets up, say, in the centre of Scotland and is successful, that that may deprive some other development area of jobs? That type of information is not, and cannot be, available to Government. Such a forecast cannot be made. The whole thing is an absurdity.

Mr. Trippier: It is not an absurdity. We would rigorously apply investigative procedures to ensure that the jobs were not simply moved from one part of the country to another.

Mr. Williams: How would the hon. Gentleman deal with a situation in which a company based, say, in London announced that it would expand in Scotland, obtained a grant from the Government and a week after receiving the grant declared redundancies of an equivalent number in its other main operation? Do the Government propose to claw back such grants? If so, how will industry know where it stands?

Mr. Trippier: If the right hon. Gentleman is referring to assistance sought by a company moving from, say, the south to Scotland, if an increase in jobs took place—there would have to be an increase in jobs to qualify—grant would be given. We have not yet decided how we shall apply the rules and regulations on the cost per job ceiling, nor indeed what that ceiling will be.
The TUC has submitted to the Department its views on the White Paper, and they are interesting. Indeed, the TUC in Wales is quoted by the Select Committee on Welsh Affairs as favouring the removal of eligibility from replacement investment. Even more interesting is the fact that the TUC supports in principle the Government's intentions, first, to make regional policy more selective; secondly, to place more emphasis on job creation; and thirdly, to extend aid to service industries.
I urge my hon. Friends to oppose the amendment.

Question put, That the amendment be made:—

The House divided:: Ayes 86, Noes 160.

Division No. 341]
[8.49 pm


AYES


Adams, Allen (Paisley N)
Cowans, Harry


Alton, David
Craigen, J. M.


Ashton, Joe
Dalyell, Tarn


Bagier, Gordon A. T.
Davies, Rt Hon Denzil (L'lli)


Beith, A. J.
Dixon, Donald


Bennett, A. (Dent'n &amp; Red'sh)
Dormand, Jack


Bermingham, Gerald
Douglas, Dick


Bidwell, Sydney
Dubs, Alfred


Boyes, Roland
Dunwoody, Hon Mrs G.


Bray, Dr Jeremy
Eadie, Alex


Brown, Ron (E'burgh, Leith)
Eastham, Ken


Bruce, Malcolm
Evans, John (St. Helens N)


Callaghan, Jim (Heyw'd &amp; M)
Fatchett, Derek


Clark, Dr David (S Shields)
Field, Frank (Birkenhead)


Clwyd, Ms Ann
Flannery, Martin


Cocks, Rt Hon M. (Bristol S.)
Foulkes, George


Cook, Frank (Stockton North)
George, Bruce


Cook, Robin F. (Livingston)
Godman, Dr Norman


Corbett, Robin
Gould, Bryan






Gourlay, Harry
O'Neill, Martin


Hamilton, W. W. (Central Fife)
Pike, Peter


Hardy, Peter
Powell, Raymond (Ogmore)


Harman, Ms Harriet
Prescott, John


Harrison, Rt Hon Walter
Randall, Stuart


Hogg, N. (C'nauld &amp; Kilsyth)
Redmond, M.


Home Robertson, John
Robinson, G. (Coventry NW)


Hughes, Sean (Knowsley S)
Robinson, P. (Belfast E)


Kaufman, Rt Hon Gerald
Rogers, Allan


Leadbitter, Ted
Ross, Stephen (Isle of Wight)


Leighton, Ronald
Rowlands, Ted


Lewis, Terence (Worsley)
Sheerman, Barry


Litherland, Robert
Shore, Rt Hon Peter


Lofthouse, Geoffrey
Short, Ms Clare (Ladywood)


McCartney, Hugh
Silkin, Rt Hon J.


McCrea, Rev William
Skinner, Dennis


McDonald, Dr Oonagh
Snape, Peter


McKay, Allen (Penistone)
Spearing, Nigel


McKelvey, William
Stewart, Rt Hon D. (W Isles)


Mackenzie, Rt Hon Gregor
Thomas, Dafydd (Merioneth)


McNamara, Kevin
Wallace, James


McTaggart, Robert
Wareing, Robert


McWilliam, John
Welsh, Michael


Madden, Max
Williams, Rt Hon A.


Marek, Dr John
Winnick, David


Marshall, David (Shettleston)
Wrigglesworth, Ian


Mason, Rt Hon Roy
Young, David (Bolton SE)


Maxton, John



Millan, Rt Hon Bruce
Tellers for the Ayes:


Nellist, David
Mr. James Hamilton and Mr. Frank Haynes.


Oakes, Rt Hon Gordon





NOES


Adley, Robert
Franks, Cecil


Amess, David
Fraser, Peter (Angus East)


Ancram, Michael
Freeman, Roger


Ashby, David
Gale, Roger


Atkins, Robert (South Ribble)
Garel-Jones, Tristan


Baker, Nicholas (N Dorset)
Goodlad, Alastair


Baldry, Anthony
Gow, Ian


Beaumont-Dark, Anthony
Gower, Sir Raymond


Bellingham, Henry
Gregory, Conal


Berry, Sir Anthony
Griffiths, Peter (Portsm'th N)


Biggs-Davison, Sir John
Ground, Patrick


Bottomley, Peter
Grylls, Michael


Bottomley, Mrs Virginia
Hamilton, Hon A. (Epsom)


Bowden, Gerald (Dulwich)
Hargreaves, Kenneth


Bright, Graham
Harris, David


Brinton, Tim
Harvey, Robert


Brown, M. (Brigg &amp; Cl'thpes)
Hawkins, C. (High Peak)


Bruinvels, Peter
Hawksley, Warren


Bryan, Sir Paul
Hayhoe, Barney


Buchanan-Smith, Rt Hon A.
Hayward, Robert


Buck, Sir Antony
Heathcoat-Amory, David


Budgen, Nick
Heddle, John


Burt, Alistair
Higgins, Rt Hon Terence L.


Butcher, John
Hind, Kenneth


Carlisle, John (N Luton)
Hirst, Michael


Carttiss, Michael
Hogg, Hon Douglas (Gr'th'm)


Cash, William
Holt, Richard


Channon, Rt Hon Paul
Hooson, Tom


Clark, Hon A. (Plym'th S'n)
Hordern, Peter


Cockeram, Eric
Howard, Michael


Conway, Derek
Howarth, Alan (Stratf'd-on-A)


Coombs, Simon
Howarth, Gerald (Cannock)


Cope, John
Howell, Ralph (N Norfolk)


Dicks, Terry
Hubbard-Miles, Peter


Douglas-Hamilton, Lord J.
Hunt, David (Wirral)


Durant, Tony
Hunt, John (Ravensbourne)


Eggar, Tim
Hunter, Andrew


Evennett, David
Jackson, Robert


Fairbairn, Nicholas
Jessel, Toby


Fallon, Michael
Johnson-Smith, Sir Geoffrey


Favell, Anthony
Kershaw, Sir Anthony


Fenner, Mrs Peggy
Key, Robert


Fookes, Miss Janet
King, Roger (B'ham N'field)


Forman, Nigel
Knight, Gregory (Derby N)


Forth, Eric
Knowles, Michael


Fowler, Rt Hon Norman
Knox, David


Fox, Marcus
Lamont, Norman





Lang, Ian
Nelson, Anthony


Lawler, Geoffrey
Nicholls, Patrick


Lee, John (Pendle)
Norris, Steven


Leigh, Edward (Gainsbor'gh)
Onslow, Cranley


Lennox-Boyd, Hon Mark
Oppenheim, Philip


Lightbown, David
Page, Richard (Herts SW)


Lilley, Peter
Peacock, Mrs Elizabeth


Lloyd, Peter, (Fareham)
Percival, Rt Hon Sir Ian


Luce, Richard
Porter, Barry


Lyell, Nicholas
Powell, William (Corby)


McCrindle, Robert
Powley, John


McCurley, Mrs Anna
Prentice, Rt Hon Reg


Macfarlane, Neil
Proctor, K. Harvey


MacGregor, John
Ridley, Rt Hon Nicholas


MacKay, John (Argyll &amp; Bute)
Ridsdale, Sir Julian


Maclean, David John
Sainsbury, Hon Timothy


McQuarrie, Albert
Skeet, T. H. H.


Malins, Humfrey
Smith, Tim (Beaconsfield)


Malone, Gerald
Steen, Anthony


Mather, Carol
Stevens, Lewis (Nuneaton)


Maude, Hon Francis
Terlezki, Stefan


Maxwell-Hyslop, Robin
Thompson, Donald (Calder V)


Mayhew, Sir Patrick
Thompson, Patrick (N'ich N)


Merchant, Piers
Trippier, David


Meyer, Sir Anthony
Viggers, Peter


Mills, lain (Meriden)
Wakeham, Rt Hon John


Mills, Sir Peter (West Devon)
Wardle, C. (Bexhill)


Moate, Roger
Warren, Kenneth


Montgomery, Fergus
Wells, Bowen (Hertford)


Moore, John
Wheeler, John


Moynihan, Hon C.
Wood, Timothy


Mudd, David



Murphy, Christopher
Tellers for the Noes:


Neale, Gerrard
Mr. John Major and Mr. Michael Neubert.


Needham, Richard

Question accordingly negatived

Mr. Norman Lamont: I beg to move amendment No. 8, in page 7, line 39, leave out
`of this Part of this Act'
and insert
`made by or under Part I or this Part of this Act unaffected (except as provided by any transitional provision of the order) by any changes effected by an order under section 1 above or section 5 below after the date which is for the purposes of section 3 below the qualifying date for the project.'.

Mr. Speaker: With this it will be convenient to take Government amendments Nos. 10, 12, 13, 20, 27, 29, 32, 37, 45, 50 and 51.

9 pm

Mr. Lamont: This group of amendments is lengthy but is concerned with one issue — the circumstances in which changes at a future date in the RDG scheme or in the assisted area map would affect projects that have already begun. When I say "future" changes I am talking not about changes that we would see in the autumn or that would stem from the first orders made under the Bill but about changes once the new legislative basis of the new RDG scheme has been established. I refer to changes in the rate of grant that might be sought by a future Administration. The amendments in no way affect the transitional provisions that, for example, will take us from the present to the revised scheme.
As I explained in Committee, one of the principal changes in the new scheme—this is an important point behind the reasons for the amendments—is the move from an asset-based RDG scheme to a project-based scheme to place assistance on the same basis as that on which industry takes decisions. The changes brought about by this group of amendments relate to projects under the revised scheme.


To be eligible for grant every project must satisfy certain conditions on its qualifying date. For projects that start before an application for approval is received by the Department, the qualifying date is the earliest of three dates—first defrayal of expenditure, first asset provided or first job provided, whichever is the earliest. For projects that have not started at the time of an application for approval, it is proposed that the qualifying date is the date on which the application is received by the Department. That aspect is dealt with under amendment No. 14.
An offer of support under the revised scheme will be quasi-contractual. If a company does what it says it will do, the Secretary of State will pay the amount of grant offered. The intention is that projects should normally be unaffected by changes to the RDG scheme after their qualifying date. There is provision for beneficial changes to be applied to such projects. More importantly, however, they will normally be protected from any changes to the scheme after their qualifying date that would reduce or take away their entitlement to grant. There is one circumstance in which there are good reasons why there should be an exception to that rule, and that is what the amendments are about.
I shall refer to a specific example. A variation in the rate of capital grant is subject to the affirmative resolution procedure, which means that there will be a gap between the laying of the draft order and its coming into effect after approval. An applicant would, therefore, learn of an impending change to the scheme when an order was laid or made. He would then have only to defray some minimal expenditure, provide a single asset or job, or even just get his application form in before the change comes into effect, and his project would have its qualifying date before that change and be guaranteed grant at the pre-change date for the lifetime of the project, which could be a number of years. That is why I stress the point that it is necessary to make these changes because we are moving from an asset-based to a project-based scheme.
An anticipatory project is referred to in the amendment and it is a project which has its qualifying date after the change is announced, but before it is implemented. We are not talking about changes that come into effect in the autumn. We are referring only to changes that might be made by a future Government once the scheme is operating.
These amendments introduce changes giving the Secretary of State powers to prevent applicants taking advantage of a period of notice to get round the changes and thus to undermine the scheme. They give the Secretary of State, by order, the power to divide a project and to pay grant at the old rate on that part which precedes the change and, if appropriate, at the new rate after the change. I have for simplicity mentioned only rates of grant, but the power extends to any change in the scheme.
Amendment No. 8 states the general principle which is that other than for the anticipatory projects the projects are protected against adverse changes.
Amendments Nos. 20, 29 and 32 detail the power to deal with anticipatory projects, which are defined in amendment No. 37.
Amendments Nos. 45 and 50 make provision to divide the project into those parts which precede and follow any change and ensure that for projects which fall into that category the Secretary of State can pay grant on at least that part which precedes the change. For example, in any normal project, expenditure will precede the creation of

jobs. If, however, no jobs were created before a change and, as a result of the change to the map, the area in which the project was located ceased to be a development area, it is possible because of the cost-per-job limit that no grant would be payable on expenditure before the change. This is plainly an anti-avoidance or anti-abuse of expenditure device. We do not want to go too far and be unfair.
What I have just described would plainly be unjust, and the power to divide the project and allocate jobs to expenditure before the change is fair and reasonable. It would be applied in respect of all changes.
The other amendments relate also to protection and anticipatory projects. Amendment No. 10 deletes the definition of a "current" project, because amendment No. 45 now defines that phrase.
Amendments Nos. 12 and 13 mean that the activities to which a project relates have to be thought to be qualifying when the project is carried out. As presently drafted, the Bill provides that a project must involve qualifying activities only on its qualifying date. It does not look forward.
If we had laid an order introducing new qualifying activities and received an application for a project involving those activities before the order took effect, we could not, as the Bill stands, approve the project. That is clearly nonsense and the amendment ensures that we cart look forward.
Amendment No. 27 deletes a subsection. The powers are more appropriate in new section 5(5A)(b). Amendment No. 50, subsection and amendment No. 51 are merely minor corrections, and consequently have no policy effects.
I stress that these amendments relate to future changes" not the changes in the RDG scheme that we are now considering through the orders to be introduced in the autumn. These are subsequent changes that might be made by a future Government when the scheme is operating. It is essentially because we have moved from an asset to a project basis that one could have circumstances in which a change had been announced but before it had been implemented, a company — because we are now operating on a project basis — would be able to incur minimal expenditure, or just take the first steps and have grant guaranteed for many years until the end of the project.
I have emphasised that people are protected against change. We are trying to prevent people taking advantage of the gap that would occur between the announcement of a change and its implementation. We are not looking for expenditure savings now, or tightening the screw. The proposal is designed to protect against abuse in future years, in the context of changes that might be made. I hope that the Opposition will be able to see it as reasonably sensible and non-controversial.

Mr. Douglas: The Minister of State has introduced a set of fairly complicated amendments and I should be grateful if he could give me some help on them. The amendments refer to anticipatory projects. These seem to be defined only in terms of application. Nowhere in the Bill is there a definition of "project" in legal terms. How does the Minister hope to overcome that difficulty?

Mr. Lamont: I cannot offhand give the exact reference, but I think that there is a definition of "project" in the Bill. Perhaps I may return to that point later on.


As the hon. Gentleman knows, the basis of the new scheme is that it should be project-based rather than asset-based.

Mr. Williams: I should like to be able to congratulate the Minister of State on the clarity of his exposition, but honesty denies me the chance to make that pleasantry. We shall read his exposition with interest and confusion tomorrow, and I suspect that it will be read with fascination and confusion for many years ahead by firms trying to interpret the Government's intentions.

My hon. Friend: the Member for Dunfermline, West (Mr. Douglas) touched on a critical point. It is difficult to grasp the difference that the Minister envisages between the asset-based and the project-based schemes. How on earth will the Secretary of State establish that the start of a project is anticipatory? What powers will he or his officials have to enable them to prove that the first moves are anticipatory rather than the normal start of a project—particularly as we understand from the Bill that it is possible for applications to be made after the start of a qualifying project?
I am at a loss to understand the Government's logic—though I can understand their generosity—in saying that they could revise the grants upwards. Both sides of the House would accept that it should not be possible for a grant to be subsequently amended downwards after a firm had embarked on a project, but I do not see why, if the grants for a particular area improve within the lifetime of a project, a company that was happy to go ahead with its project on the original basis should be given a gratuitous handout that it did not need to get that project started. The Bill is supposed to be about efficiency. Where is the efficiency in paying more for a project that has already been started?

Mr. Norman Lamont: I am greatly dismayed that the right hon. Gentleman did not find my explanation clear. If he thought it unclear, he should have seen the first three drafts. Nevertheless, I shall read it to see whether it falls short of the model of clarity that I thought that I was conveying with such conviction.
I do not think that defining an anticipatory project is a great problem. It will be a project that occurs during the period between the announcement and the implementation of a change. People will be protected before that, but not in the interim.

Mr. Williams: In other words, any project—even one that would have taken place during that time anyway—would be regarded as anticipatory even if it clearly was not so because its timing was entirely unrelated to the subsequent announcement of the Government's decision. Is that correct?

Mr. Lamont: I am afraid so—if it had not started. If its qualifying date was before the announcement of the change, it would be protected. Otherwise, however, the right hon. Gentleman is right. It would not be protected in that circumstance.

Mr. Williams: In that case, will the hon. Gentleman do me the courtesy of explaining the logic of his statement that projects that have already started will be allowed the higher rate of grant, which was not anticipated when they

were set up, but that those set up deliberately to avoid a lower rate of grant in the future will not be allowed a similar benefit? Frankly, I do not see the logic of the Government's position.

Mr. Lamont: It applies not just to the rate of grant but to several things. For example, it might apply to the job grant. The hon. Member for Coventry, North-West (Mr. Robinson) constantly suggested in Committee that the job grant might be eroded by inflation. It is to meet precisely that consideration that there is this generosity, as the right hon. Gentleman described it, whereby a project that has already had its qualifying date and has already started before the changes are made will be able to take advantage of the changes. I should have thought that the whole House would welcome that. Most of the time there has been an onslaught on me for cutting things. Now I am told that I am being too generous.

Amendment agreed to.

Mr. Lamont: I beg to move amendment No. 9, in page 7, line 44, at end insert—
'"expenditure", in relation to an asset provided by being manufactured, constructed or devised by any person, includes such sum as appears to the Secretary of State to be properly attributable to its provision by that person in that manner, and the sum so attributed shall be treated as having been paid at such time as the Secretary of State may direct;'.
The amendment rectifies the accidental exclusion from the Bill of a provision in the 1982 Act concerning self-built assets. RDG is payable on capital expenditure on assets. Normally a company which, for instance, needs plant or machinery that qualifies for grant will buy it and then claim grant on the relevant expenditure. As the House knows, however, companies do not always buy assets in that way. Sometimes the assets are self-constructed. The company may have an engineering department which constructs or part-constructs a tool. That is the purpose of the amendment.

Amendment agreed to.

Amendments made: No. 10, in page 8, leave out lines 21 and 22.

No. 12, in page 8, line 30, after 'are', insert 'to be'.

No. 13, in page 8, line 38, after 'are', insert 'to be'.—[Mr. Norman Lamont.]

Mr. Lamont: I beg to move amendment No. 14, in page 9, line 6 after 'of, insert 'the receipt of 
Like Government amendment No. 8 and the rest, this should be categorised perhaps not as an anti-avoidance provision but as an anti-windfall provision. In this case, the intention is to block a possible abuse of a provision. To be eligible for a grant, all projects must satisfy the conditions set out in new section 3(1) of the 1982 Act on a qualifying day.
For projects, the whole of which are still to be carried out by the date of application for approval, the qualifying date under the Bill is as at present—the date on which the application is made. The amendment is designed to avoid the possibility that that provision could be abused when the application is made. When an announcement is made of a change to the scheme that would reduce or take away entitlement to grant—for example, a reduction in the rate of grant—our policy is that applications made before the date for projects that have yet to start will be protected from that change, but applications made after that date for projects that have yet to start will not be so protected.


Under the Bill as drafted, a person might dishonestly rush to submit a back-dated application on hearing the announcement of a change. It would be literally impossible to prove deception. The amendment avoids the problem by referring to the date an application is received rather than the date it is made.
Opposition Members may feel that it is a somewhat far-fetched position, but the right hon. Member for Swansea, West (Mr. Williams) will no doubt recall that it has been known to happen in the case of RDGs.

Amendment agreed to.

Mr. Milan: I beg to move amendment No. 18, in page 10, line 1, leave out from beginning to 'the' in line 3.

Mr. Speaker: With this we shall take the following amendments:
No. 19, in page 10, line 1, leave out
`Subject to any reduction in'
and insert
`After consideration of any adjustment of'.
No. 21, in page 10, line 4, after 'be', insert
`subject to the absolute ceiling fixed above the ceilings expressed in EUA per job created by the initial investment if the project is withing the manufacturing sector, and shall not be so subject if it is within the service sector—'.
No. 60, in page 10, line 7, leave out 'higher' and insert `highest'.
No. 23, in page 10, line 10, leave out from `expenditure' to end of line 13.
No. 61, in page 10, line 16, at end insert—
`(iii) the amount produced by applying the European Economic Community net grant equivalent limit for the creation of jobs.'.
No. 24, in page 10, line 21, leave out from `expenditure' to end of line 24.
No. 62, in page 10, line 26, after 'provided', insert 'the higher of (i)'.
No. 63, in page 10, line 28 at end insert—
`(ii) the amount provided by applying the European Economic Community net grant equivalent limit for the creation of jobs.'.
No. 30, in page 11, line 33, leave out from 'above' to `shall' in line 35.
No. 31, in page 11, line 33, leave out
`with any reduction to give effect to'
and insert 'after consideration of'.
No. 35, in page 12, line 1, leave out paragraph (d).
No. 36, in page 12, line 5, leave out from `circumstances' to end of line 8.
No. 44, in page 12, line 44, leave out sub-paragraph
(5).
No. 46, in page 13, line 9, leave out 'or 5(c').

Mr. Milan: Two separate issues are involved in this group of amendments—at least, they were separate in my mind when I tabled them. Unless I have misread the Bill, they are definitely separate issues and I shall deal with them as such.
The first issue involves the EEC, and amendments Nos. 18 and 30 are examples of that. I do not understand why it is necessary to write EEC obligations into the legislation. There is an explanation in the White Paper about replacement assets, but the Bill does not refer—

Mr. Norman Lamont: rose——

Mr. Milan: No, I shall not give way yet.
The Bill does not mention any obligation—it simply states the broad terms.
I am aware that until 1979—and probably up to the present time—there have been certain understandings at

Community level about the overall amount of assistance that may be given in any case. There has been a requirement to submit details of schemes to Brussels for vetting and monitoring. I am not sure how honestly that procedure has been followed by the member states—there is certainly a great deal of suspicion that there is not absolute honesty in these matters, as there is not absolute honesty in many Community matters.
The United Kingdom has tried to maintain its levels of grant within the overall levels laid down by the Community. That has been done without any necessity to write anything into legislation. Why is it now necessary to do so, and what exactly does it cover? Something new might be involved. I regret that the Government intend to exclude the obligation on replacement assets from the new scheme. I deplore the need to write such provisions into the Bill. Amendments Nos. 18 and 30 take out those references. My hon. Friend the Member for Coventry, North-West (Mr. Robinson) has tabled amendments that deal with the subject in a different way. He assures me that they are much better than mine. I am happy to take his word for that.
The second group of amendments—Nos. 23, 24, 35, 36, 44 and 46 — deal with the point covered comprehensively in the definition in paragraph 5(1)(d) of schedule 1 concerning the prescribed limit for capital expenditure. This is one bit of the Bill to which I do not object in principle. I understand that it says that there might be large projects to which the normal rules will not apply. If that is the case, the definition is comprehensive and could be applied to a much wider range of circumstances. It is also one of the most clumsy definitions that I have seen. If the Minister is determined to keep the definition he should examine it as it is possible to make nonsense of it. Many restrictions and qualifications flow from the definition. We are entitled to ask for an explanation of what it means, especially as under paragraph 5(5)(a) different amounts for different classes of undertaking can be prescribed.
The Bill tries to cover every eventuality and provides that the Minister can do almost anything that he wants at any time and in any circumstances. The Minister was asked what the definition of a project is and why it was not included in the Bill. To be in the spirit of the Bill, the definition ought to be that a project is whatever the Minister decides it is. Everything else is what the Minister decides it is. It is highly unsatisfactory that everything should be put in such comprehensive terms.

Mr. Norman Lamont: It might be for the convenience of the House if I speak now to answer some of the points raised by the right hon. Member for Glasgow, Govan (Mr. Millan). He must forgive me if I was eager to intervene when he asked whether it was necessary to refer to these EC limits. The answer is that it is not. I chose to write it in because I wanted to be helpful and open to the House. I have bitterly regretted that decision. All that it has done is stir up a hornets' nest, not of penetrating points but of complete irrelevancies and misunderstandings resulting in a total waste of time.
9.30 pm
Seeing that the limits which existed when the Labour party was in office were there, and since we were introducing a new Bill, I felt that it would be a good idea to put them in the legislation so that people were aware of them. Although the limits existed when the Labour party


was in office, I have been berated about them. I have been asked why I have tolerated the provision. The hon. Member for Coventry, North-West (Mr. Robinson) asked in an earlier debate what consultation we had had on the EC limits. How he thinks I could have consulted on EC limits set when the Labour party was in office, I fail to see.
The effect of amendments Nos. 18 and 20 is to remove the requirement in the Bill for any grant payable to a project to comply with the EC limits. It has nothing to do with replacement investment. It is concerned with the net grant equivalents and with the amount of money which can be used in regional policy.
Removing the limits from the Bill would not in any way alter the reality. The right hon. Member for Govan can amend the Bill back to its virgin form before it appeared on my desk, but he will not alter the reality of the EC limits. They exist because a foolish, naive Minister established them.
Amendments Nos. 23, 24, 35, 36, 44 and 46 deal with the cost-per-job ceiling, as the right hon. Member for Govan guessed. I am glad that the right hon. Gentleman said that he accepted the principle of the cost-per-job ceiling, although he might argue about the arithmetic or where it bit. He accepts the principle, and that is the purpose of the different parts of schedule 1 that he identifies in his amendments.
I shall look at what the hon. Gentleman said about the drafting and see whether there is any way in which it can be made less broad and more pointed.

Mr. Geoffrey Robinson: Before discussing my own amendment, No. 19, I must congratulate my right hon. Friend the Member for Glasgow, Govan (Mr. Millan) on his most effective intervention in the previous debate. It would have been preferable if the Minister had had the stamina to see through what for him has been a difficult Committee stage and a not altogether happy Report stage.
I am quite sure that the Minister regrets ever, as he thought at the time, coming clean with the Committee on these EC regulations. I am sure that he did it very much against the advice of his officials, who probably told him that he would be opening up Pandora's box. However, he did it, and I could not quite believe it when he did. I thought that there must be some difficulty there that we had not spotted and that the Government had failed to cover. As we got into the EC limits and what the Government proposed to do, it became clear that the Government were not sticking to the limits, which it appears from the Community regulations give an either/or situation—either 5,500 ecus or 40 per cent.
My right hon. Friend the Member for Govan has clearly read the reports of the Committee and other stages of the Bill in considerable detail and has the knowledge of the 1972 legislation. The Government are not sticking to the EEC procedures at all. If we were talking about a net grant of 5,500 ecus or a 40 per cent. prescribed percentage and a prescribed amount of £3,200—which is an operating subsidy in the way that the RDG could never be construed as except by a weak-kneed Tory Government anxious to please the competition directorate—and were it the case that the Government were putting to us that we should formally abide by the EEC limits as defined in Community document C31, we could have left the matter there.

However, it is clear from the debate on the European regional development fund on 6 May that the Government were anxious to go ahead of anything that was in the EEC legislation and they have done so effectively. They have also introduced the cost-per-job limit, which is not an EEC legislative requirement. They have made it clear that their purpose in doing that, and indeed their purpose in the Bill, is to reduce RDG both as administered under the Industrial Development Act 1982 and under section 7. It is no good the Parliamentary Under-Secretary in his innocence pretending that that is not the case because it is.
On 8 May the Minister of State made the Government's intention clear. It is no good the Government trying to wriggle out of it. We would have much more respect for them if they came clean. He said:
At present regional development grants do not qualify for support from the ERDF, so there can be no question of making up the difference.
There is nothing extra there. He went on to say:
Furthermore, although regional development grant will be cut, we have made it clear that part of the cut will be replaced by selective assistance.
Then came a most telling intervention. I asked the same question myself on numerous occasions, but without a reply. It is obvious that the Minister feels it easier to reply to his side of the House than to this. The hon. Member for Wolverhampton, South-West (Mr. Budgen) asked:
Does my hon. Friend agree that the Government's overall aim is to reduce expenditure on these projects?" — [Official Report, 8 May 1984; Vol. 59, c. 854.]
By definition "these projects" has to be RDG and selective assistance under section 7. The simple categorical answer, probably the only one during the Committee stage from the Minister, was "Yes".
There can be no further question about any imponderables that may exist in the imponderable mind of the Parliamentary Under-Secretary about what might be made up from grant or services. The Minister directly responsible, who had been through a tortuous period of cross-examination, stated quite categorically that the overall aim is simply to cut.
It is for that reason that I have to say that throughout Committee we have viewed with the gravest misgivings the unnecessary straitjacket into which the Minister wants to put himself. We have made it clear time after time that not only does one not unnecessarily put oneself on a hook, as he did when he proposed this particular amendment early on in the Committee stage, but one does not without good reason put oneself at a disadvantage against other countries when competing for inward investment.
We do not for one second disagree with him about the need to get more jobs and more effective investment. But we do say that all the Minister has done is to remove a degree of automaticity—in his words—or Government flexibility, or a combination of the two. In doing so he has unnecessarily placed himself and the country at a considerable disadvantage. That is the precise point that is made in the amendments. We have tried to make it clear that we should not set the limits so low that there could be any question that the amount of grant that can be given under RDG as limited by the job ceiling would put the country at a disadvantage.
Can we now assume that the position is still as it was when the Bill was amended, that while non-job-creating modernisation does not qualify for RDG, job-creating modernisation would, irrespective of the size? That was not clear from what the Parliamentary Under-Secretary


said. [Interruption.] We shall see from Hansard. It may have been clear to the Parliamentary Under-Secretary but it was not clear to Labour Members. There was consternation in the officials' Box and among Labour Members. I felt sorry for him. I have a high regard and respect for him, as he knows. He should not have been replying on that and I made that clear to him. I hope he takes that in the well-meaning spirit in which I put it to him.
I wish to refer briefly to one other amendment. The Under-Secretary gave an undertaking that manufacturing would not be adversely affected by what was now being proposed and would stand at no disadvantage. However, as the Minister well knows, the purpose of amendment No. 21 is to make it clear that investment in manufacturing industry is at a disadvantage in the sense that the amount per head created cannot exceed a given percentage of the RDG. That does not apply in the service sector. I can imagine many small low capital investment projects in manufacturing in which it might be advantageous to take an indefinite amount of the prescribed amount which is the job subsidy. We have put this to the Minister time and again in Committee. We have argued ad nauseam that he is putting himself in progressively more difficult and unnecessarily restrictive circumstances for one purpose only. It is not good enough for him to say that we are going to be good Europeans. As my right hon. Friend the Member for Govan made clear, there is no black and white in the area of regional policy. Each country is out to extend—I will not say bend—the rules to the maximum for its national advantage, and why should it not do so? That is what Governments are for—at least, that is what we used to think, until this legislation was introduced.
I ask the Minister to make clear that the wording in amendment No. 21, while it may not be technically proficient in every respect, is a correct statement of what will be written into the Bill. We shall not push amendment No. 21 to a vote. That is unnecessary. It is merely a probing amendment at this late stage to make sure that we have understood the workings of the Minister's mind, and to make clear the extent to which we regard what is being proposed as disadvantageous to the regional policy, and to the general industrial policy of the country.
I revert to amendment No. 19. I put it to the Minister that, while we might have accepted, even unamended, the foolish preamble that he introduced to schedule 1 had he said something to the effect, "We will abide, upwards or downwards, by whatever the EEC rules," what we find inexplicable is that we should make our policy
Subject to any reduction in any of the following amounts.
The Minister will doubtless say that it does not really mean that. If it does not mean that, let us use wording that makes that clear. If it is a job limit, we detest the wording of it, but we detest even more the substance of it. If it is the Minister's intention to make clear that we shall abide by the EEC rules, and, in making that clear, he wants to come clean with the House, and make us appear good Europeans, maintaining that the Secretary of State will do everything that he is told, or everything that he is strictly allowed to do, why is it that he finds it so hard to accept amendment No. 19?
I quoted earlier from the March report of the regional directorate, which spoke of the dire plights that it envisaged our regions being plunged into by the Government's policies. There are three specified criteria, the specified amount, the specified percentage, and the

specified limit. I still await an answer to whether the specified limit will be treated by way of statutory instrument, or whether it will be subject to an affirmative resolution. That is not covered in the Bill.
9.45 pm
Three criteria will govern the financial impositions. The Government will not object to that description. They intend to impose financial disciplines because they think that they will achieve better value for money. Perhaps that will produce trends which are a threat to the Community. Perhaps the regions will have the upper hand. Perhaps the regional directorates will get the upper hand over the competition directorates. May we have an assurance that the Minister will not stick to his own target, which is far below the EEC's, particularly since he may put himself in one of two silly positions? First, we may not obtain as much as we wish and, secondly, we may put ourselves at a disadvantage in terms of attracting investment.
I suggest that we vote in favour of amendment No. 19, which is a reasoned amendment. It is both reasonable and sensible and would remove a totally negative cost-cutting approach which the Government have made the hallmark of their regional policy. We do not expect any great changes in policy, but if the Minister feels that it is an unnecessary amendment, will he explain where else in the Bill our desires can be catered for? Why does the Bill specify a reduction? We must have a reason for the Bill's wording.
I do not want the Minister to refer to another part of the Bill that we cannot find, to the White Paper which is not relevant, or even to the money resolution, which the Under-Secretary seems to have forgotten in the fluster of the moment. Our amendment is reasoned, understandable, and acceptable.

Mr. Wrigglesworth: We were confused a few minutes ago when the Minister moved the Government amendment and we are even more confused by the speech from the Opposition Front Bench by the hon. Member for Coventry, North-West (Mr. Robinson). I read carefully the Committee proceedings and I am still confused. I cannot see the basis of the Opposition's objections, particularly when I read the comments by the right hon. Member for Swansea, West (Mr. Williams) who —perhaps significantly—is no longer on the Opposition Front Bench. The right hon. Gentleman said:
I found the Minister's explanation in relation to the EEC persuasive and important. I understand why certain powers are needed by the Minister to ensure that we do not find ourselves in breach of the established ceilings which, as he said, have operated regardless of Administration. They have been part of the EC system ever since we have been members of it." — [Official Report, Standing Committee J, 28 February 1984; c. 131–2.]
The right hon. Member for Swansea, West seemed to be saying much the same as the Minister in the early part of the debate.

Mr. Geoffrey Robinson: The cost-per-job ceiling is the only one that does not exist in the EEC. I take exception to it. Amendments Nos. 18 and 19 seek to remove the cost-per-job ceiling. It is not an easy obligation to carry. Britain accepted it in advance of any other country. We see no need for doing so. There is no difference between my right hon. Friend and myself on that point. Indeed, I would point out that he has been here for much more of the debate that the hon. Gentleman.

Mr. Wrigglesworth: I accept that. I am not trying to make a point about the right hon. Gentleman not being here during the debate, but that he is not present for the debate on what I regard as an important matter. He made a relevant contribution in Committee. I cannot accept why it should be thought so remarkable that the Government accept the point that has been made. The Government seem to be unable to avoid the obligation. As in other amendments before the House, it is legitimate for the hon. Gentleman and his right hon. Friend to criticise the Government for a policy that is central to the Bill, namely one introduced to change the balance of the grant structure so that the automaticity of grants paid on capital projects is brought more into balance with grants given for jobs created. However, it is difficult to sustain and carry to its ultimate conclusion.
A broad spectrum of opinion maintains that the existing grant system needs to be reformed. I share some of the anxieties expressed by the hon. Member for Coventry, North-West and, no doubt, by some Conservative Members with certain constituency interests, about the impact on firms in, say, Teesside—ICI, Shell, Philips, and others — which have received substantial grants. Partly as a result of that they have been able to achieve substantial operations in the regions. Looking at the matter in the round, one must accept nevertheless that the Government's change is right in principle.
The right hon. Member for Glasgow, Govan (Mr. Millan) spoke about the non-specific nature of the subsection. I have much sympathy with his views. However, I hope that the right hon. Gentleman accepts that it is important that Ministers should have some discretion over grants. One of the benefits that has often come from the Industry Act 1972 is the discretion over projects that Ministers are able to exercise. That has worked well in favour of the regions in creating employment. Although one wants to know the Government's clear intentions, one does not wish to remove the flexibility with which Ministers can apply the rules to individual circumstances as they arise.
I need to be much more convinced by the arguments put forward in favour of the amendment by the right hon. Gentleman and his hon. Friends this evening before I could support them. I do not want there to be a Dutch auction, certainly not within the EEC. It is bad enough that it takes place in countries outside the Community. It is not in anyone's interest to have a ratchet effect Dutch auction.
I support what the Minister has done to ensure that the practice ends within the Community. In the past some nonsensical bidding-up of grants has occurred. That has done no good to industry or to taxpayers. Unless I hear a much better explanation of the grounds for supporting the amendments, we shall not support them in the Lobby this evening.

Mr. Norman Lamont: I am grateful to the hon. Member for Stockton, South (Mr. Wrigglesworth). I was beginning to doubt my sanity. The remarks of the hon. Member for Coventry, North-West (Mr. Robinson) did not make much sense. Even usually sensible people such as the hon. Member for Dunfermline, West (Mr. Douglas) and his hon. Friends were going through a vigorous "Hear, hear" exercise. I could not make out whether that was purely tribal or whether it was intentional. Judging by appearances, it would seem that the hon. Gentleman actually believes that there is something proven about the

amendments. I find it very difficult to reply to the debate, because I do not know exactly what I am to reply to. Perhaps the most useful thing I can do is to explain the effect of the amendments and then sit down.
Let me explain why the amendments are unnecessary. As has been said, the cost-per-job ceiling is not an EEC requirement. We all agree on that, and have said it many times. The hon. Member for Coventry, North-West is against it, but the right hon. Member for Glasgow, Govan (Mr. Millan) thinks that there is something to be said in favour of it. It is said that the Government are putting the RDG scheme in a European straitjacket, but we are doing nothing of the sort. The hon. Member for Coventry, North-West may object to the cost-per-job limit, but these amendments concern the EEC limits. Consequently, one assumes that the hon. Gentleman's remarks referred to the EEC limits. It cannot be said that including a reference in the legislation to EEC limits is in any way putting the British RDG scheme or British industry in a straitjacket.
I was asked why the legislation referred simply to
Subject to any reduction in".
The answer is that the grant will have to be reduced if the EEC limits are breached. Limits only work in that way. If the limit is hit, one's national grant has to be reduced. I cannot make it any clearer than that.

Mr. Geoffrey Robinson: That is not the point. The undertaking that I sought in Committee and have asked for again tonight is that if the EEC limits are increased because it is felt that the disparities in the regions are so great that the Community's very cohesion—to use the Euro-fanatic terms of the SDP—may be put at risk, the Minister will reconsider and, indeed, increase his limits in line with the revised upward limits of the EEC.

Mr. Lamont: I was coming to that point, because amendment No. 63 ensures that we would have to increase our grants if the EEC increased its limits. However, I take it that the hon. Gentleman is satisfied with my explanation so far, and that he now understands that grant will have to be reduced if we breach the limits imposed by the EEC. That is why the Bill says "reduction", and that is the only reason why.

Mr. Douglas: We are talking about including in the legislation an explicit commitment to adhere to EEC obligations. From the Minister's comprehensive examination of regional policy legislation among member states of the Community, can he name any other nation that accepts that explicit Community obligation? Are there other nations that do it directly?

Mr. Lamont: I assume that by "do it directly" the hon. Gentleman wants to know whether those countries write that into their legislation. I am afraid that I do not know whether it is written into German legislation, but it makes no legal difference. The provision has direct legal effect in this country, whether or not it is written in the legislation. In a detached, bipartisan way, I have explained the matter to the House. The hon. Member for Stockton, South understands it, even if no other Opposition Member does. Indeed, I shall be grateful to him for ever and a day.
Amendment No. 21 is again entirely unnecessary. In Committee the hon. Member for Coventry, North-West asked for confirmation that the 40 per cent. ceiling would apply to service sector projects. I can confirm that it would not apply to the service sector and that under the EEC limits it applies to manufacturing. That being the case, I


cannot see the point of the amendment. It would have no legal effect and would not change what would happen without it.
I was asked—in relation to amendments Nos. 60 to 63—whether, if the EEC increased the maximum limit on grant to companies, we would automatically increase ours. The answer is no. We want a regional policy geared to achieving its objective at reasonable cost. If the Government decided that £X was a sufficient incentive and the EEC maximum level was higher, it is suggested that we should automatically pay a higher level of grant. We might adjust it, but I do not see why we should give an undertaking definitely to adjust it upwards simply because the EEC limit was raised. Not even the most irresponsible——

It being Ten o'clock, the debate stood adjourned.

Ordered,

That, at this day's sitting, the Co-operative Development Agency and Industrial Development Bill may be proceeded with, though opposed, until any hour. —[Mr. Sainsbury.]

Question again proposed, That the amendment be made.

Mr. Lamont: It cannot make sense to pay more than is necessary. Even the Opposition must accept that. Accordingly, I urge my hon. Friends to reject this wholly nonsensical amendment.

Mr. Millan: It is a pity that the Minister did not have second thoughts and remove all the references — that would have been the effect of my amendment—and we might have saved ourselves a lengthy debate. I gather that my Front Bench wishes us to vote on Amendment. No. 19, and accordingly I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendment proposed: No. 19, in page 10, line 1, leave out
'Subject to any reduction in'
and insert
'After consideration of any adjustment of'.—[Mr. O'Neill.]

Question put, That the amendment be made:—

The House divided: Ayes 89, Noes 176.

Division No. 342]
[10.01 pm


AYES


Adams, Allen (Paisley N)
Eastham, Ken


Ashton, Joe
Evans, John (St. Helens N)


Bagier, Gordon A. T.
Fatchett, Derek


Banks, Tony (Newham NW)
Field, Frank (Birkenhead)


Bennett, A. (Dent'n &amp; Red'sh)
Flannery, Martin


Bermingham, Gerald
Foulkes, George


Bidwell, Sydney
George, Bruce


Boyes, Roland
Godman, Dr Norman


Bray, Dr Jeremy
Gourlay, Harry


Callaghan, Jim (Heyw'd &amp; M)
Hardy, Peter


Clark, Dr David (S Shields)
Harman, Ms Harriet


Clwyd, Ms Ann
Harrison, Rt Hon Walter


Cocks, Rt Hon M. (Bristol S.)
Haynes, Frank


Cook, Frank (Stockton North)
Hogg, N. (C'nauld &amp; Kilsyth)


Cook, Robin F. (Livingston)
Home Robertson, John


Corbett, Robin
Hughes, Sean (Knowsley S)


Corbyn, Jeremy
Janner, Hon Greville


Cowans, Harry
Kaufman, Rt Hon Gerald


Craigen, J. M.
Leadbitter, Ted


Crowther, Stan
Leighton, Ronald


Dalyell, Tarn
Lewis, Terence (Worsley)


Davies, Rt Hon Denzil (L'lli)
Litherland, Robert


Dormand, Jack
Lofthouse, Geoffrey


Douglas, Dick
McCartney, Hugh


Dubs, Alfred
McCrea, Rev William


Dunwoody, Hon Mrs G.
McDonald, Dr Oonagh


Eadie, Alex
McKay, Allen (Penistone)





McKelvey, William
Rogers, Allan


Mackenzie, Rt Hon Gregor
Rowlands, Ted


McNamara, Kevin
Sheerman, Barry


McTaggart, Robert
Short, Ms Clare (Ladywood)


McWilliam, John
Silkin, Rt Hon J.


Madden, Max
Skinner, Dennis


Marek, Dr John
Snape, Peter


Marshall, David (Shettleston)
Spearing, Nigel


Maxton, John
Stewart, Rt Hon D. (W Isles)


Millan, Rt Hon Bruce
Thomas, Dr R. (Carmarthen)


Nellist, David
Wareing, Robert


Oakes, Rt Hon Gordon
Welsh, Michael


O'Neill, Martin
Williams, Rt Hon A.


Pike, Peter
Winnick, David


Powell, Raymond (Ogmore)
Young, David (Bolton SE)


Prescott, John



Randall, Stuart
Tellers for the Ayes:


Redmond, M.
Mr. James Hamilton and Mr. Don Dixon.


Robinson, G. (Coventry NW)



Robinson, P. (Belfast E)





NOES


Adley, Robert
Freeman, Roger


Alton, David
Gale, Roger


Amess, David
Garel-Jones, Tristan


Ancram, Michael
Goodhart, Sir Philip


Ashby, David
Goodlad, Alastair


Aspinwall, Jack
Gow, Ian


Atkins, Rt Hon Sir H.
Gower, Sir Raymond


Atkins, Robert (South Ribble)
Gregory, Conal


Baker, Nicholas (N Dorset)
Griffiths, Peter (Portsm'th N)


Baldry, Anthony
Ground, Patrick


Beaumont-Dark, Anthony
Hamilton, Neil (Tatton)


Beith, A. J.
Hanley, Jeremy


Bellingham, Henry
Hargreaves, Kenneth


Berry, Sir Anthony
Harris, David


Biggs-Davison, Sir John
Harvey, Robert


Boscawen, Hon Robert
Hawkins, C. (High Peak)


Bottomley, Peter
Hawksley, Warren


Bottomley, Mrs Virginia
Hayhoe, Barney


Bowden, Gerald (Dulwich)
Hayward, Robert


Bright, Graham
Heathcoat-Amory, David


Brinton, Tim
Heddle, John


Brooke, Hon Peter
Hickmet, Richard


Brown, M. (Brigg &amp; Cl'thpes)
Higgins, Rt Hon Terence L


Bruce, Malcolm
Hind, Kenneth


Bruinvels, Peter
Hirst, Michael


Bryan, Sir Paul
Holt, Richard


Buchanan-Smith, Rt Hon A.
Hooson, Tom


Buck, Sir Antony
Hordern, Peter


Budgen, Nick
Howard, Michael


Burt, Alistair
Howarth, Alan (Stratf'd-on-A)


Butcher, John
Howarth, Gerald (Cannock)


Carlisle, John (N Luton)
Howell, Ralph (N Norfolk)


Carttiss, Michael
Hubbard-Miles, Peter


Cash, William
Hunt, David (Wirral)


Chalker, Mrs Lynda
Hunt, John (Ravensbourne)


Channon, Rt Hon Paul
Hunter, Andrew


Clark, Hon A. (Plym'th S'n)
Jackson, Robert


Cockeram, Eric
Jessel, Toby


Conway, Derek
Johnson-Smith, Sir Geoffrey


Coombs, Simon
Jones, Gwilym (Cardiff N)


Cope, John
Kershaw, Sir Anthony


Dicks, Terry
Key, Robert


Douglas-Hamilton, Lord J.
King, Roger (B'ham N'field)


Dover, Den
Knight, Gregory (Derby N)


Durant, Tony
Knowles, Michael


Eggar, Tim
Knox, David


Evennett, David
Lamont, Norman


Fairbairn, Nicholas
Lang, Ian


Fallon, Michael
Lawler, Geoffrey


Fa veil, Anthony
Lee, John (Pendle)


Fenner, Mrs Peggy
Leigh, Edward (Gainsbor'gh)


Fookes, Miss Janet
Lennox-Boyd, Hon Mark


Forman, Nigel
Lightbown, David


Forth, Eric
Lilley, Peter


Fowler, Rt Hon Norman
Lloyd, Peter, (Fareham)


Fox, Marcus
Luce, Richard


Franks, Cecil
Lyell, Nicholas


Fraser, Peter (Angus East)
McCurley, Mrs Anna






Macfarlane, Neil
Peacock, Mrs Elizabeth


MacGregor, John
Percival, Rt Hon Sir Ian


MacKay, John (Argyll &amp; Bute)
Porter, Barry


Maclean, David John
Powell, William (Corby)


McQuarrie, Albert
Powley, John


Major, John
Prentice, Rt Hon Reg


Malins, Humfrey
Proctor, K. Harvey


Malone, Gerald
Rhys Williams, Sir Brandon


Marlow, Antony
Ridley, Rt Hon Nicholas


Mather, Carol
Ridsdale, Sir Julian


Maude, Hon Francis
Sainsbury, Hon Timothy


Maxwell-Hyslop, Robin
Skeet, T. H. H.


Mayhew, Sir Patrick
Smith, Tim (Beaconsfield)


Mellor, David
Steen, Anthony


Merchant, Piers
Stevens, Lewis (Nuneaton)


Meyer, Sir Anthony
Terlezki, Stefan


Mills, Iain (Meriden)
Thompson, Donald (Calder V)


Mills, Sir Peter (West Devon)
Thompson, Patrick (N'ich N)


Moate, Roger
Trippier, David


Montgomery, Fergus
Viggers, Peter


Moore, John
Wakeham, Rt Hon John


Moynihan, Hon C.
Wallace, James


Mudd, David
Wardle, C. (Bexhill)


Murphy, Christopher
Warren, Kenneth


Neale, Gerrard
Wells, Bowen (Hertford)


Needham, Richard
Wheeler, John


Nelson, Anthony
Wood, Timothy


Neubert, Michael
Wrigglesworth, Ian


Nicholls, Patrick



Norris, Steven
Tellers for the Noes:


Oppenheim, Philip
Mr. Archie Hamilton and Mr. Douglas Hogg.


Page, Richard (Herts SW)

Question accordingly negatived.

Amendment made: No. 20, in page 10, line 1, after 'to', insert
'any transitional provision under section 1 above or section 5 below and to'.—[Mr. Norman Lamont.]

Mr. Norman Lamont: I beg to move amendment No. 26, in page 10, leave out lines 29 to 31.

Mr. Speaker: With this it will be convenient to take Government amendments Nos. 40, 41 and 43.

Mr. Lamont: I said in Committee that I would reconsider whether there should be powers to prescribe nil rates for capital grant and nil amounts of job grants. I tried to assure the Committee that there was nothing sinister in the proposals. I said that the only position in which we might want to have a nil rate of grant was where there was over-provision of a certain class of asset; for instance, a surplus of factories in development areas because of separate programmes to provide factories, in which case we might not wish to pay a grant on factories.
I said that it was extremely unlikely that we should ever want to use the powers and that the measure would give us extra flexibility. Having reconsidered the matter, I have come to the conclusion that, in view of the extreme unlikelihood of the Government wanting to use those powers, they can be removed. That is why we have the amendment. The right hon. Member for Glagow, Govan (Mr. Millan) has tabled an amendment which has exactly that effect. Our amendment and the Opposition amendment are identical, and I commend them to the House.

Amendment agreed to.

Amendments made:

No. 27, in page 10, line 32 leave out subsection (2).

No. 29, in page 11, line 2 leave out 'under subsection

(2) above during the currency of the project' and insert
'to be made by any transitional provision made applicable to current projects'.
No. 32, in page 11, line 34 after first 'any', insert
'increase or reduction required by any transitional provision and any'.
No. 37, in page 12, line 8 at end insert
'and "anticipatory project", in relation to a variation of the qualifying activities, the prescribed percentage, the prescribed amount or a prescribed limit, means a project whose qualifying date falls in the period beginning with the making or, as the case may be, the laying in draft of the order and ending with the date on which the variation takes effect, with a corresponding meaning in relation to a variation under section 1 above in the areas which are assisted areas of any particular category'. —[Mr. Norman Lamont.]

Mr. Milan: I beg to move amendment No. 39, in page 12, line 16, at end insert
'and may in particular include the provision of advance factories'.
This amendment would make an addition to the provision in the Bill dealing with the specification of qualifying activities. The reason why I tabled it is that it is not clear, from the Bill, what the position on the provision of advance factories might be. Under present legislation the question of grant depends ultimately on the use to which the advance factories are to be put —whether they are used for qualifying activities or not.
Under the Bill we are dealing with a different kind of system where the grant is payable in relation to projects. I am inquiring whether a project for the provision of advance factories might qualify for assistance under the Bill. In Scotland advance factories are most frequently provided by the Scottish Development Agency or local authorities. It might be that whether grant was payable would not be a factor in the decision of those bodies to provide advance factories. However, they could also be provided by private interests. I should not want to inhibit any interest from a private company or development company which was willing to provide advance factories. It is not clear whether they would qualify for assistance under the Bill.
It is a point, among others, which has been brought to my attention in a memorandum from the Institute of Chartered Accountants in Scotland. It is worth exploring, but whether it should be written into the Bill is perhaps another matter. I should be grateful if the Minister could give me an assurance that in suitable circumstances such a project could qualify for assistance under the Bill.

Mr. Trippier: Under the regional development grant scheme, the cost of providing a factory is eligible for grant, as the right hon. Member for Glasgow, Govan (Mr. Milian) has said where, the factory is to be used for qualifying activities. Advance factories qualify for grant when they are sold or let, unused, to companies engaged in qualifying activities but not otherwise.
The right hon. Member has suggested that the provision of advance factories should become a qualifying activity in its own right. Since that is, presumably, irrespective of the uses to which those factories are subsequently put, at first sight the amendment does not seem desirable. I appreciate that, without the certainty that the occupant will be engaged in activities which qualify for grant, there may be a disincentive to construct or convert premises. In contrast, an incentive to provide, unrelated to subsequent use or need, may result in the subsidy of non-qualifying activities or, even worse, a stock of empty factories.
I appreciate that the amendment would not compel us to regard that activity as qualifying, but there would, of course, be a presumption that it would be if it were the only activity to be referred to in the primary legislation, and for the reasons that I have given, I cannot agree to it. However, the right hon. Gentleman is aware that we are consulting on qualifying activities and I will consider whether provision of factory units should be regarded as a qualifying activity. I hope that given this assurance, the right hon. Gentleman will not press his amendment.

Mr. Milan: I am glad that this matter is to be looked at. I have sympathy with what the Minister said about the

undesirability of paying grant when one is not clear what, at the end of the day, the units will be used for. However, it is a case of the chicken and the egg. Factories are less likely to be built on a speculative basis—I use the word "speculative" in a non-pejorative sense, referring to someone who is taking a risk and hoping to let units for what might be qualifying activities—if there is doubt as to whether grant is to be paid. However, if the Minister will consider the matter again, I beg to ask leave to withdraw the amendment.

Amendment, by leave withdrawn.

Amendments made:: No. 40, in page 12, line 22, leave out
`(including a percentage which is nil)'.
No. 41, in page 12, line 25, leave out
`(including a percentage which is nil)'. — [Mr. Norman Lamont.]

Mr. Milan: I beg to move amendment No. 42, in page 12, line 28, at end insert
'provided that in the case of development areas the percentages shall be no less than 15 per cent. and in the case of special development areas the percentages shall be no less than 22 per cent.'.
The minimal levels in the amendment are the existing levels for the percentage of grant to be paid on qualifying capital expenditure in development and special development areas, the percentage for development areas being 15 per cent. and for special development areas 22 per cent.
One of the difficulties which have been referred to today is that it is difficult to judge the overall effect of the Bill before some of the more important details have been disclosed to us and debated. One of the main areas of uncertainty is the rate at which grant will paid on qualifying expenditure when capital expenditure is the basis for the grant.
We know that there are to be substantial savings—the Government have admitted that. The Government' s main objective in introducing the White Paper and the Bill is to save money. According to paragraph 34 of the White Paper, the overall extent of the savings will depend, first, on the spread of the geographical area—whether there is a change in the assisted areas map—and, secondly, on the rates of grant.
The Minister was anxious to assure me that I was wrong in assuming that there was to be a considerable reduction in the number of assisted areas. I am not sure that I made any such assumption in my earlier speech. My point was that there was considerable apprehension in some areas that they would be removed from the map. If it is true, as the Minister seemed to imply, that there might not be substantial reductions in the assisted area map, it follows that one way in which the Government will reduce expenditure will be by reducing the percentage payable as grant on capital expenditure.
As the representative of a special development area, I fear that the Government may take the apparently less politically contentious line of not removing too many more areas from the assisted areas map — they removed a considerable number in 1979 — and achieving the savings by giving grants at a much lower percentage than at present. Both those paths — reducing the map coverage and reducing the percentage payable as grant—are equally objectionable to the Opposition.
The Industrial Development Act 1982 lays down the percentages payable. The percentages are stated in the legislation, although it is true that they can be altered by


order. We have complained about the uncertainty surrounding the Bill, and here is another example of it. No percentages are given in the Bill, and we have been given no indication of the Government's thoughts on the matter.
No doubt the Minister will say that this is one of the matters for consultation under the terms of the White Paper. I do not know how far that consultation is genuine, but if Ministers genuinely intend to listen carefully to representations on the White Paper I should make it clear that all those whom I have seen from Scotland — I cannot believe that they have been different elsewhere—have made the following two points. First, they say that the overall total of regional aid should not be reduced. Everyone in the development areas has said that, as well as the Scottish Council and even the CBI in Scotland, I believe. Secondly, they say that the rates of grant on which the Government are ostensibly consulting—as I have said, I hope that it is genuine consultation—should not be reduced from their present levels. Those levels are needed if there is to be adequate incentive to invest, to expand capacity and so on in the development areas.
A great many new uncertainties will be created by the legislation and the whole assistance scheme will be taken less into account by potential investors than is the present scheme. If lower levels of grant are added to that uncertainty, the whole regional aid scheme will be irretrievably damaged. The amendment therefore seeks to enshrine the present levels of aid in the Bill. They are not especially generous by Common Market standards and are well within the EEC maxima. I hope that my hon. Friends and perhaps some other hon. Members will support the amendment.

Mr. Trippier: I have listened carefully to the right hon. Gentleman, but I am sure that no one would be more surprised than he if I accepted the amendment, except possibly my colleagues at the Treasury. As the right hon. Gentleman knows, we have been consulting about what future rates of grant should be, and he rightly referred to the period of public consultation which ended last week. We have not yet considered all the responses which we have received, and in those circumstances it would be premature to make any decision.
The amendment would prejudge the outcome of the consultations, not just on rates of grant, but on the assisted area map, as it assumes the continuance of a three-tier map with RDG at differential rates within the development areas and special development areas. Another issue on which we have consulted is whether the map should have two tiers, with RDG available only in the inner tier. Again, a decision has yet to be reached on that.
It would be entirely wrong to prejudge the issue by trying our hands in advance in respect of grant rates and the shape of the map. I hope that the right hon. Gentleman will seek leave to withdraw the amendment.

Mr. Williams: If the Minister intended to console anyone, he has done the opposite. He has created great alarm. This is the first time that we have heard the proposition that we may end up not just with only two tiers, but with only one of them receiving regional development grant. That is even worse than we had suspected or feared and there would be a great outcry if any such decision were announced.

As for the present levels of grant, I agree with my right hon. Friend the Member for Glasgow, Govan (Mr. Millan). He and I were Opposition spokesmen when the original 1972 legislation was passed and we both subsequently had responsibility for regional policy, he in relation to Scotland and I nationally. I regard the present levels as the basic minimum. There would be little attraction if the 15 per cent. level was reduced—we regard it as a basic figure.
10.30 pm
There is also the problem of continuity and predictability. The present regime has been in operation for only four years. Ministers have trotted abroad speaking to Japanese and American investors, trying to tell them what the system will be. We all know how confused overseas investors become by the various representations from different groups in Britain, and when the Government, on subsequent visits, announce changes in the regime, it hardly helps international understanding of what is being offered.
The Minister will reject the amendment. We understand his sheltering behind the possible slap over the knuckles from the Treasury, but the cloak of consultation was a more respectable protection. My right hon. Friend the Member for Govan was right to move the amendment to establish what we regard as the basic minimum for regional development grant.

Amendment negatived.

Amendments made: No. 43, in page 12, line 35, leave out
`(including an amount which is nil)'.
No. 45, in page 13, line 7, at end insert—
'(5A) Transitional provisions under subsection (2)(b), (3)(c), (4)(b) or (5)(c) may—

(a) provide for the attribution of part of an anticipatory project to the period before the variation takes effect and its approval in accordance with the attribution; and
(b)apply increases or, in the case of anticipatory projects, reductions in a percentage, amount or limit to current projects, that is to say, projects for which applications for approval for grant have been received or which are in the process of being carried out.'. —[Mr. Norman Lamont.]

Mr. Milian: I beg to move amendment No. 48, in page 13, line 40, at end insert:
`(9) Any person aggrieved by a decision or determination of the Secretary of State under Section 3 and 4 above or under this Section may, in the case of a project located in England appeal to the Industrial Development Advisory Board or in the case of a project located in Scotland or Wales to the Scottish Industrial Development Advisory Board or Welsh Industrial Development Advisory Board respectively and in any such case the relevant Board may require the Secretary of State to vary or modify his decision or determination.'.
As has been said on numerous occasions, the new scheme is very much subject to the discretion of and determination by the Secretay of State. Although certain limits will be laid down by statutory instrument, even when the outlines of the scheme have been filled in a large element of discretion will be left in the hands of Ministers to determine whether certain assets fall within the categories, whether certain assets should be excluded, to determine job losses in certain parts of the country to be set against job gains in the project under consideration, and so on. Many schemes that will meet the general criteria, even as laid down by statutory instrument, can still be excluded at the discretion of the Secretary of State. That gives immense powers to Ministers—something


which, at an earlier time, might have caused Conservative Members concern. Absolute powers are to be given to the Secretary of State for determination and decisions.
There is no appeal against the various determinations. The Secretary of State uses his own judgment, although in practice his officials will do much of the work. Only the larger projects will be dealt with by Ministers. There is no way to dispute the Secretary of State's judgment.
There is a parallel in selective assistance, which will be continued. The various Ministers responsible for selective assistance refer to the industrial development advisory boards, which give independent judgments and provide advice to Ministers. Applicants for selective assistance can feel that their cases are being considered not only by civil servants and Ministers but by an independent body—admittedly appointed by Ministers — which includes people from banking, industry, the trade unions and so on. That system works extremely well. The people who serve on the boards do a considerable and unpaid public service.
That machinery will continue for selective assistance, but the Bill converts automatic regional development grants into a halfway house between those automatic grants and selective assistance. In those circumstances, there should be an opportunity for dissatisfied applicants to take their case to a body that will examine the matter. Such a body exists to deal with selective assistance and we should use it to examine applications that have been turned down.
There is a misprint in my amendment as, towards the end, "require" should be "request". That makes quite a difference to the meaning of the amendment. I noticed the misprint and asked for it to be corrected some weeks ago, but it has not been. I understand that it is not possible to have an advisory board which can simply overturn the Minister's decision. I am not asking for such executive authority, although it might be nice with the present Government. Such a request would be unrealistic. I am merely asking that a dissatisfied applicant should be able to go to an independent body which, if it feels he has a case, can ask the Minister to reconsider. If the amendment is not accepted, I hope that Ministers will consider some way in which to satisfy applicants by having their rejected applications examined outside the ministerial and Civil Service structure. I envisage there being many dissatisfied applicants under the new scheme. My amendment would assure industry that everything was not subject to the determination and decison of Ministers and officials.

Mr. Trippier: I suspect that the right hon. Gentleman is trying to help me and my colleagues by providing an intermediate buffer or tier that would save our having to deliberate on many cases. That is one way in which to interpret the amendment. I am grateful to him for pointing out the misprint as I did not understand the wording when I examined it again this afternoon. The word "request" rather than "require" helps to explain the main thrust of the right hon. Gentleman's amendment.
Nevertheless, there is no escaping the fact that the amendment would create another tier of bureaucracy. Under present arrangements, as the right hon. Gentleman said, applicants who consider a decision to be wrong or harsh can and sometimes do appeal to Ministers or via their Members of Parliament. We all know about that. All such cases are reconsidered centrally to ensure consistency and Ministers have to be satisfied that the decision is correct. These arrangements, which have existed for many years

under governments of both parties, have proved satisfactory. I assume that Opposition Members believed that to be the case when they were in office because they did not seek to delegate to an outside body responsibility for the decisions that were taken by their officials.
The Opposition's arguments for yet a further level of bureaucracy have not convinced me of the need to change a system which works and, more importantly, which ensures the consistency vital to the operation of an automatic scheme operated on the basis of statutatory criteria and published rules. What is more, I could not accept that if such a new system of appeals were implemented, its decisions should be binding on the Secretary of State. This would be inconsistent with the accountability of Ministers to Parliament for the scheme. Therefore, I advise the House to reject the amendment.

Mr. Williams: That was a less than adequate response to the argument. It is no good quoting what happened in the past, because the system was much simpler and more straightforward. There is an incredible degree of discretion, and this has led to a reduction in certain of the discretionary powers that Ministers are claiming.
We have seen today the confusion that exists even in the minds of such clear-minded people as the Minister of State in trying to interpret what is meant by this legislation. If, as he assured us, we should have seen the first three drafts, we can understand that there will be a difference of opinion about the interpretation and facts of an individual case.
The amendment is not creating an extra level of bureaucracy. It is using a level that exists already. When it comes to fairness and equity, we have to be ready to accept a marginal inconvenience to Ministers to ensure that there is seen to be even handedness. It is understandable that outside the House people may he less than happy with the judgment of the people who framed the Bill in the first place, and their ability to sit as adjudicators is hardly enhanced by their record in recent months.

Mr. Wrigglesworth: I am grateful to the right hon. Member for Glasgow, Govan (Mr. Millan) for drawing to the amendment to his drafting. It is a pity that we were not made aware of it before the debate began, because it affects fundamentally the terms of his amendment.
I hope that the Minister will reconsider. It is inevitable that anxiety will be felt when such a wide degree of discretion is given to Ministers. I accept what the Minister said about the amendment building in another tier of bureaucracy. No one wants that if it can be avoided. But it may be that the advisory procedure that is adopted on the selective sections of the 1972 Act could be applied to this legislation. That would provide at least a degree of independent view on the discretion being exercised by Ministers. Whether we should go as far as the amendment proposes and provide a right of appeal, I am not sure. But to have some independent voice in the system because of the increased powers being given to Ministers would be welcomed by people in industry who feel that neither civil servants nor Ministers understand industry in the way that they should. To have the voice of industry in the form of the advisory boards would work effectively.
I remember when the right hon. Member for Chesterfield (Mr. Benn) was Secretary of State for Industry and was taking decisions with which the advisory


board did not agree. Conservative Members were quick to marshal! the advice being given to the Minister and being turned down by him to demonstrate his doctrinaire and not very sensible views.
There is evidence that these advisory boards play a useful role, and it may be that a provision of the kind suggested by the right hon. Member for Govan could be built into the Bill before completion of its passage through Parliament.

Mr. Millan: We have heard a ludicrous answer from the Minister. It is ludicrous to compare this system with the present system of regional development grants which are basically almost exclusively completely automatic. At the moment an applicant for a regional development grant has only to prove that he has incurred certain capital expenditure on qualifying activities in a particular location. The number of jobs to be provided has nothing to do with it. That is a matter of judgment. There is a simple test. There is no need for an independent appeal under the present system of regional development grants. That is being replaced by a system with a large element of discretion and judgment. There is no question of deciding on facts which are indisputable. The schedule is riddled with the Secretary of State's discretion to make all the essential decisions as to whether a grant should be payable and on what basis. That is in the hands of the Secretary of State. He or his officials on his behalf will be making judgments all the way through.
Schedule 1, paragraph 3, states that the approval of a project for grant rests with the Secretary of State. Paragraph 3(4) states:
In approving a project for grant the Secretary of State shall determine as the basis for the payment of grant what, in his opinion, is—

(a) the amount of capital expenditure on assets to be provided by the project;
(b) the number of jobs to be provided by the project."


If an applicant says that if a project goes ahead he plans that it will provide an extra 200 jobs or 500 jobs the Secretary of State can say that in his opinion it will provide only 50 or 100 jobs. His judgment will override any other and there will be no appeal against it. The applicant must take it or leave it.
The present scheme is basically not a matter of judgment, but this is. There may be matters of interpretation as to whether a particular activity falls strictly within the qualifying activities laid down and they have sometimes given rise to difficulties. I am in no doubt about that. I have taken cases to Ministers and decided cases myself which have been on the margin. But they have basically depended on physical facts such as particular types of machinery and particular kinds of activity as laid down specifically and precisely in legislation. Here we are dealing with opinion.
Paragraph 3(5) says:
In making a determination … the Secretary of State may … take account of the provision of assets of some classes or descriptions but not others".
The Secretary of State has an unfettered discretion. He can aggregate jobs. Again, he makes his judgment about the number of jobs which will be provided and he can aggregate them in any way he wishes.
Paragraph 3(6) says:

the Secretary of State may. … direct that his approval will extend, if he so determines at any time, to such additional assets or jobs as he indicates in the direction.
Again, those are matters of judgment which all rest in the hands of the Secretary of State.
I could quote many more examples. Paragraph 4(5) says:
grant in respect of any job may be paid at any time after the time when, in his opinion, the job is provided.
The approved number of jobs is that approved by the Secretary of State.
Paragraph 5(8) says:
The Secretary of State may give directions, which may be general directions or directions concerning a particular case, as respects the determination of — (a) any question as to the classification of an asset as between the following three classes, that is to say—
machinery or plant;
buildings;
works".
Many of those are matters of judgment where there may be legitimate differences of opinion. Sometimes the element of judgment about the number of jobs will depend on what will happen in future, not what is happening at the precise time. All that is left in the hands of the Secretary of State.
It is ludicrous to compare all those provisions, taken as a whole, with the present system, which is simple, direct and based on precise facts with certain opportunities for interpretation but which basically are not in dispute between the applicant and officials dealing with his application. That is why there has been no particular difficulty in leaving these matters to the decision of civil servants with the normal business of appealing to the Member of Parliament to talk to Ministers and so on.
We are dealing with a different matter here. One man's judgment, that of the Secretary of State, is set against the judgment of the applicant, and there is no appeal. It has been said that my amendment would create more bureaucracy. I am astonished at the unfettered powers that this is giving to bureaucrats. These decisions in the generality of cases will not be taken by Ministers. They will never pass over a Minister's desk, unless some of the judgments give rise to so many complaints that Ministers will be forced to look at them. These will be decisions of bureaucrats against businessmen. The Government are supposed to be supporting businessmen, but the Bill is a bureaucrat's paradise. Some kind of independent judgment will have to be exercised in cases of dispute, with the ultimate authority resting with the Secretary of State, which I do not dispute. The Minister's reply was extraordinary.
The Minister must look at this again. I hope that he will give the House an assurance that he will look at it again. The machinery that I suggest would, I believe, be the best, because it already exists. One would be dealing with sensible people who have industrial, financial and other experience who are used, in dealing with selective assistance cases, to making judgments about the number of jobs to be provided, and so on. One would be asking them to do an additional job in an area where they are already well experienced. If the Minister objects to this procedure, that is not to condemn the notion out of hand. I believe that some way will have to be found to satisfy dissatisfied applicants that their applications have not been turned down on the diktat of the civil servant acting on


behalf of a Minister. Some way must be found in which such applicants can have their cases looked at again with an independent element involved.
I do not like the scheme, as I have made clear, but, if we have to have it, there must be some safeguard for the dissatisfied applicant.

Amendment negatived.

Amendment made:: No. 50, in page 14, leave out lines 27 to 29 and insert—
'4. In section 1 of the Industrial Development Act 1982—

(a) in subsection (5), for the word "change" there shall be substituted the word "variation" and at the end there shall be added the words "but no provision shall be made having the effect of reducing the amount of grant payable on current projects except in the case of anticipatory projects (as defined in section 5(1) and (5A) below).".
(b) for subsection (6) there shall be substituted the following subsection—

"(6) Without prejudice to the generality of subsection (5) above the transitional provisions as respects grant under Part II of this Act may include provision for the attribution of part of an anticipatory project to the period before the variation takes effect and its approval in accordance with the attribution."; and
(c) in subsection (8), for the words "section 4(5)(a)" there shall be substituted the words "section 5(7)(b)".'. —[Mr. Norman Lamont.]

Schedule 2

REPEALS

Amendment made: No. 51, in page 16, line 4, leave out `section 1(6)'.—[Mr. Norman Lamont.]

Motion made, and Question proposed, That the Bill be now read the Third time.—[Mr. Norman Lamont.]

Mr. Deputy Speaker (Mr. Ernest Armstrong): I have to inform the House that Mr. Speaker has not selected the amendment in the name of the right hon. Member for Tweeddale, Ettrick and Lauderdale (Mr. Steel).

Mr. Williams: May I set at ease the minds of Conservative Members who have avidly waited to hear the last dying gasps of the debate by saying that there is to be no vote on Third Reading by the Labour Opposition, and please will they not make too much noise on leaving? There is a simple reason for this. We have made it clear that we are bitterly opposed to the principles implicit in the regional section of the Bill. We have made it equally clear that we wish well to the first section of the Bill relating to the Co-operative Development Agency. Since to vote against the regional section would be to vote against the co-operative development agency, we have no intention of forcing a vote. However, this indicates the ridiculous situations in which the Opposition can be placed by the combination of two utterly unrelated Bills in one piece of legislation, as has happened in this case. I know that it is convenient for the business managers of the House, but it is bad legislation, and makes for great difficulties in the House.
The fact that we shall not vote against Third Reading does not erode our conviction that the Government are in error in not building in a provision that intermediate areas can be offered intermediate area grant if at some stage the Government think that desirable. The enabling power

could have been put in the Bill. Ministers might not need to activate that power, but it could and should have been given.
The new regime represents a major erosion of the principle of predictability. Great store is placed upon predictability by business men, the CBI and small businesses. Without it incentives are of no account.
Our basic objection remains that to which we have referred at each stage. The Bill is yet another major erosion of regional policy, another attack on the assistance that should be available to alleviate the desperate position of many assisted areas. For those reasons, we think that the Government are wrong in their proposals. Our fears have not been allayed by explanations of possible formats that might be adopted eventually after Ministers have completed their analysis of consultations. All the possibilities are before us. We regard them as dangerous. The principle behind the Bill is penny-pinching arid unrelated to regional policy. It relates to the wish to make economies regardless of how disastrous those economies may prove to be.

Mr. Philip Oppenheim: Regional aid, though conceived with the best intentions, has been a limited success. It has shifted, not solved, problems. The best estimates show that jobs created—if indeed they have been created—have cost about £40,000 each. The system has been geared to financing equipment rather than jobs. Automatic grants have too often created unwanted extra capacity and unviable businesses. Too often the open-ended subsidies for huge capital-intensive projects have created minimal employment in areas with poor communications and unsuitable skills. These are the problems with which British industry is still grappling.
Despite that, regional aid has still a role to play. Improvements in the Bill will be of enormous benefit in getting round the problems. One of the main ways in which regional aid should be used is in helping areas which are undergoing severe, sudden transitions because of the closure of major local industry. My constituency underwent just such a traumatic transition after the war. In 1948 in Amber Valley, 15 mines gave work to 15,000 colliers. By 1969 not one pit was left. More than half had been closed under Labour Governments.

Mr. Williams: On a point of order, Mr. Deputy Speaker. We are glad to see the new-found interest of the hon. Member for Amber Valley (Mr. Oppenheim) in the Bill which we have been considering for many months and we welcome his maiden speech on the subject. I did not think that constituency speeches complied with the rules on Third Reading.

Mr. Deputy Speaker: Comments made during Third Reading debates must be related to the Bill. If the remarks of the hon. Member for Amber Valley (Mr. Oppenheim) are related to the Bill, they will be in order. I am listening carefully to his remarks.

Mr. Oppenheim: Will all due respect to you. Mr. Deputy Speaker, and to the right hon. Member for Swansea, West (Mr. Williams), if he will sit and listen for 30 seconds more, he will understand that my remarks relate to the Bill. If you rule to the contrary, Mr. Deputy Speaker, I must accept that.
Regional aid helped Amber Valley enormously in the 1960s and 1970s, but, just as the area saw the good side


of regional aid then, so it has seen the bad side since 1982, when regional aid was withdrawn. Since then, the area has suffered from many of the anomalies of the present system. Amber Valley has an unemployment rate of almost 15 per cent. Two of the main towns, Alfreton and Heanor, come under the Nottingham travel-to-work area, where unemployment is much lower. Those towns no longer qualify for aid, despite the difficulty and expense met by local people when going to Nottingham.
The travel-to-work areas are some of the worst facets of the current system. While Alfreton and Heanor, with high unemployment, cannot get aid under the existing system due to the Nottingham travel-to-work area, the situation is reversed in other towns. Beverley, where unemployment is at only 7·1 per cent., gets aid because it comes under the Hull travel-to-work area. There are many other such anomalies.
I therefore greatly welcome the Bill's introduction of far more flexible methods to delineate areas that will receive aid. I hope that the Minister will use his discretion under the provision to pinpoint areas of particular need, such as Alfreton and Heanor, as marginal areas have recently suffered most from the negative side of regional policies.
We are surrounded to the north and east by assisted areas and it is hard to persuade new industries to come to Amber Valley. Indeed, I have been told by some local business men that only loyalty to the area and the skills of the work force have prevented them from going to Wales or Scotland to collect their massive capital grants.
Amber Valley does not ask for charity or handouts. But, after pulling themselves out of the abyss after the pits closed 20 years ago, the people of Amber Valley ask merely for fair and equitable treatment. Industries in the area can fight the recession and foreign competition, but they find it hard to fight unfair competition for jobs and the beggar-my-neighbour policies of some of the development areas and corporations.

Mr. Millan: I should like to ask one question to which I hope the Minister will reply after this short debate. How will the arrangements be administered at Civil Service and, in particular, ministerial level in relation to Scotland and Wales? Regional development grants remain a Department of Trade and Industry function, even in Scotland and Wales, although the civil servants dealing with the matter work with Scottish Office civil servants who deal with, among other matters, selective assistance under section 7 of the Industry Act 1972, now under the 1982 Act.
The system works perfectly well, for reasons which I shall not relate at length but which the Minister, in his answer during the previous debate, did not seem to appreciate. Regional development grants are given automatically. In a sense it does not matter whether the civil servants dealing with them in Scotland are Department of Trade and Industry civil servants or work for the Scottish Office, because they are dealing with an automatic system, on the basis of the criteria laid down in the legislation.
When we move to a more selective system, and when we are told, as we have been several times today, that some of the deficiencies or gaps in the system can be taken up by the necessary adjustments to regional selective

assistance, in Scotland both forms of assistance should be dealt with by the same Department—both the scheme of assistance under the Bill, which is mid-way between automatic and wholly selective, and the selective assistance which is already dealt with by the Scottish Office. It will not be workable as a matter or practice unless both of those functions, which will have a much closer relationship than before, are operated by the same Department. The Department in Scotland should be the Scottish Office.
I assume that the matter has been considered in relation to the Bill. I hope that the Minister will be able to say something about it tonight. However, I understand that he may have some inhibitions. He is not yet the Prime Minister, and the right hon. Lady, not Ministers, makes these dispositions. If the Minister cannot say that a decision has been made, I hope that he can at least say that the matter is under consideration and let us know when the decision will be made.
I stress that I am not talking about increasing the powers of the Scottish Office as distinct from those of the Department of Trade and Industry just for the sake of it. In Scotland, and no doubt similarly in Wales, too, the fact that selective assistance is dealt with by the Scottish Office with civil servants in Scotland, on the spot, without having to refer to London, is considered a tremendous boon by industry there. It is supported by the CBI, chambers of commerce and so on. I am sure that they expect the transfer to be made from the Department to the Scottish Office, and not the other way round. If that has not yet been decided, I hope that the Minister will let us know that it is under consideration and that an announcement may be expected soon.

Mr. Alan Howarth: At this late stage in the consideration of the Bill, it is still important to advance some general considerations of principle in relation to that part of the Bill that deals with regional policy. I appreciate, applaud and share the Government's concern to find effective policies to alleviate social distress, and particularly to help those areas that are hardest hit by the great evil of unemployment. I also appreciate the Government's concern to eliminate some of the obviously wasteful and unsatisfactory features of regional policy as it has been.
I am, however, concerned that the Bill embodies not a fresh approach to the problems that beset many of the older industrial areas of the country but a diluted and modestly revamped application of the approach that has produced such disappointing results up until now. It is very clear that regional policy has failed to achieve the purposes for which it was intended. Indeed, £20 billion has been spent over the past 20 years, and yet the so-called "assisted" areas have continued to experience relative industrial decline and ever higher unemployment. Industries in those areas have been uncompetitive, with British industry——

Mr. Nicholas Budgen: Does my hon. Friend agree that one of the purposes of the policy was to disadvantage formerly prosperous areas and, in particular, the west midlands? In that respect it has been quite successful.

Mr. Howarth: rose——

Mr. Deputy Speaker: Order. The hon. Gentleman must confine his comments to what is in the Bill.

Mr. Howarth: I shall certainly discuss the central thrust of the policy, as outlined in the Bill. I appreciate the importance that must be attached to that. However, with his customary felicitous irony, my hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen) has made a point of central importance, and with your permission, Mr. Deputy Speaker, I hope to have an opportunity to return to it shortly.
During the past two decades, industries at the receiving end of policies that are very much those embodied in the Bill, have achieved a very low rate of return on capital. They have lost share in the world market for manufactured goods and have failed—as the Government have rightly pointed out—to be sufficiently innovative. There have, of course, been many reasons for that, but it is clear that regional policy, on a scale more lavish than the Government presumably intend for the future, has failed to counter those other damaging forces, and it is arguable, indeed, that regional policy has perversely contributed to the problem. Ministers have, I think, acknowledged that.
Paragraph 18 of the White Paper points out the added burden of taxation caused by expenditure on regional grants and the incentive that they have created for firms to invest in locations that are not the best for them. Yet the Bill still provides, in clause 4, for development grants to be made on a regional basis, and in schedule 1, for them to be extended to service industries. The policies of the Bill represent differences of degree but hardly of kind, and could be regarded, in the extension to services, as an extension of the old approach, rather than as a retraction of it.
It seems that the sort of approach which the Bill substantially perpetuates was nevery likely to work well and is not likely to do so in the future. The Government are committed to maintaining an effective regional policy, but I doubt whether, under these or any other provisions, they will succeed in doing so.
We have been told that although an economic case for regional industrial policy may still be made, it is not self-evident. The Government believe that the case for continuing the policy is now principally a social one with the aim of reducing, on a stable long-term basis, regional imbalances in employment opportunities. But if jobs are in question, as they rightly are, and if the economic case is not self-evident, then the social case for the policy is not made. Jobs follow from credible economic policies. I should have thought that the economic case was not just not self-evident but was implausible.
We have often heard of the tragic closures of plants that were put down in assisted areas because the Government of the day used taxpayers' money to induce firms to invest where their ordinary business judgment would not have told them to go. In other contexts, the Conservative party takes the view that politicians and bureaucrats do not know better than businessmen how to run their businesses.
No one has a crystal ball, but at least investors and managers take their decisions by reference to criteria that are mainly to do with the success of the firms in question. Governments, in the nature of the political process, are inevitably impressed by political considerations and interest group pressures, and thus find themselves taxing profitable businesses to raise money to induce other businesses to go either where they would not have intended

to go or where they would have wanted to go in any case. Under the scheme of selective assistance, they will, I fear, tend to support projects that are endorsed by conventional wisdom, that are championed by the most vigorous lobbies and are of political, rather than economic, value. The presumption must be that in these decisions they siphon capital away from what would have been more productive uses.
One debate that has arisen out of this measure is the balance to be struck in the allocation of grants between automaticity — to use an ugly jargon term — and selectivity. Neither principle is satisfactory. Automaticity means investing taxpayers' money indiscriminately and regardless of the merits of the company or sector in question. Is it a judicious use of public money, for example, to invest in mature industries which may not represent the long-term future of the country? The Government have, understandably, chosen to swing the emphasis towards selectivity. But politicians are not well placed to take invidious decisions as between favouring one firm or group of workers against another, and the judgment of a Government official is a poor substitute for that of an investor on the promise of a business. The CBI has warned against increasing the selective or discretionary element in the dispensation of grants. Neither way are we likely to see national resources most effectively deployed, and to that extent job prospects—at any rate, the prospects for competitive and sustainable jobs—deteriorate rather than improve.
More broadly, there will, I fear, be damaging atmospheric and cultural consequences of the policy for the perpetuation of regional development grants which the Bill contains. Although the total to be distributed may be somewhat less, there will still be a mass of Government bodies—not just the Department of Trade and Industry but the Scottish Development Agency, the Welsh Development Agency, the Department of the Environment, local authorities and new town corporations — engaged in handing out grants. It is unlikely, therefore, that we shall see any alteration in the attitude of mind so damagingly ingrained in our nation to look to the state for direction and help.
Moreover, the emphasis that the Government are placing on the creation of jobs through regional development grants carries with it some danger that firms may, in easier times, revert to the over-manning that has been one of the principal causes of the record unemployment that we are now witnessing.
That approach will do nothing to discourage the trade unions from believing, however wrongly, that in a crunch the Government will put in yet more money rather than face the political difficulties of job losses from inefficient major employers. We have travelled a long way from the ruinous assumptions of the 1970s and we should do nothing to prevent the continuing development of responsible attitudes.
This new version of regional policy strikes me as being really quite old fashioned. My right hon. Friend the Chancellor of the Exchequer has justified his reforms of corporation tax very much on the basis that businessmen have been spending too much time in tax planning and have not been thinking enough about using their capital investment productively. But will not the perpetuation of regional development grants encourage businessmen to continue to think in terms of grant planning rather than trading profitably? A former ministerial colleague of my


right hon. Friend, who is now in another place, drew attention in The Times recently to the case of the Hyster Corporation, a multinational manufacturer of fork lift vehicles which is adept at grant-hopping round the world and which traded at a substantial loss last year. The company has recently received a grant from the Scottish Office in direct consequence of which the much better run Lansing Bagnall fork lift truck company in unassisted Basingstoke has had to make 250 of its employees redundant.
That episode brings me to the issue raised by my hon. Friend the Member for Wolverhampton, South-West, which is the crucial criticism of regional policy old and new. The principle of regional discrimination is unfair and damaging. As I have argued, there are strong grounds for doubting whether that sort of assistance in reality helps the regions into which it is channelled. There is no real dispute that it damages unassisted regions. The submission to my right hon. Friend the Secretary of State by the west midlands regional economic consortium makes the case strongly that the west midlands has suffered very much from the incentives that have been provided to businesses to go to other areas. It was regional policy very largely that brought the west midlands to its present predicament because of the powerful incentives that were provided by Governments to locate new business elsewhere rather than in the west midlands. The anticipation now is that the Government will try to make amends by designating part of the west midlands conurbation as an assisted area on the redrawn map. The effect of this will be to apply within the west midlands the same principle of discrimination that previously did so much harm to the area as a whole. Existing businesses in adjoining areas will find themselves in competition with subsidised businesses in assisted areas. People thinking of starting new businesses or expanding present ones will naturally go to the assisted areas, so damaging prosperity and jobs in the unassisted areas.
Local businessmen in my constituency, which is in the west midlands, have put this argument to me in strong terms. I am bound to say that I share their anxieties and I ask Ministers to give due consideration to them. The Government protest that their revised regional policy as set out in the Bill will not merely transfer jobs from one part of the country to another. I am yet to be persuaded how they will avoid that happening.
The White Paper alludes to complementary policies that have existed to stem the depopulation of rural areas. The reality is that underneath an overlay of prosperity deriving from agriculture, retirement homes, second homes and commuters, many rural areas are in economic decline. People born and bred in country villages cannot find jobs. They matter, too. It will no doubt surprise many to learn that unemployment in the Stratford-on-Avon employment exchange area rose between 1973 and 1983 by more than twice the national increase. In south Warwickshire we do not begrudge policies that will genuinely help other areas with desperately high levels of unemployment, but we do not want policies that will be placebos to them and bad medicine for us.
The Government's real task at this stage of our history is to remove the obstacles that their predecessors have put in the way of prosperity. The best thing that the Government can do for the regions that are hardest hit by

industrial decline and the recession is to restore sound money and properly functioning markets. We need to reduce inflation. We need to reduce interest rates. We need to reduce taxes, especially so as to encourage the provision of venture capital.

Mr. Deputy Speaker: Order. The hon. Gentleman must relate his remarks to the Bill and to the changes in policy that the Bill will bring into being rather than make general remarks about economic policy.

Mr. Howarth: I hope that, in my next few sentences, I can do precisely what you have urged on me, Mr. Deputy Speaker. I am coming to the point that is immediately pertinent to the Bill.
The way to do these desirable things is to limit public spending more effectively. There will be a massive struggle to hold public expenditure even to its present targets. The policy embodied in this Bill, with its absence of costings, and so much that is left to governmental discretion, will not make control of public expenditure any easier. The £1,000 million to be spent this year by different Departments on varieties of regional aid would indeed be a valuable contribution to the financial policies that would be in the best interests of the country as a whole.
In these debates, the Government have offered as a justification for going on with regional policy the argument that we would not be eligible for grants from the European regional fund if we did not have our own home-grown regional policy — a matter to which paragraph 4(1) of schedule 1 is relevant. Between 1975 and 1983 we received £1,147 million from the European fund. That is rather less than £150 million a year on average and hardly sufficient to justify distorting our economy. The impressive energies of my ministerial Friends are better directed, in the interests of British manufacturing and services in all parts of Britain, towards turning the EEC into a genuine common market.
It is appropriate that what the Bill provides should be looked at in relation to policies that could be put alongside it and would save public expenditure. I have in mind deregulation, reform of the labour market and reform of local government finance. I shall not enlarge on those points, Mr. Deputy Speaker——

Mr. Deputy Speaker: Order. The hon. Member must not persist and trade on the tolerance of the Chair. He must relate his remarks to what is in the Bill.

Mr. Howarth: It is not my intention to abuse your tolerance, Mr. Deputy Speaker. I shall not elaborate on some points that it would be highly desirable to make in this argument. I shall restrain myself from making the points that I wanted to make about how it might be preferable to spend taxpayers' money on improvements of the infrastructure, on research and on alleviating capital taxation.
Ministers have as good as made the case against regional policy on economic grounds, yet they propose in the Bill to maintain it because of an assessment of political necessity that is uncharacteristically timid and short-sighted and because of the political difficulties of implementing some policies that would really help the regions that are afflicted by such high unemployment.
My hon. Friends on the Front Bench find themselves somewhat in the position of St. Augustine who wanted


chastity but not yet. Although I am not a puritan or intolerant, I find it difficult to support them in that position.

Mr. Wrigglesworth: It is regrettable that the hon. Member for Stratford-on-Avon (Mr. Howarth) did not make the same speech on Second Reading and did not follow it through with a vote in the Lobby with the rest of us who are against the Bill if he is so strongly opposed to its provisions. It is an abuse of the conventions, if not the procedures, of the House to speak in that way about the Bill's contents. He and other hon. Members who accept his views have mislead the House about regional policy over the years and the impact that the Bill will have on that policy.
The hon. Gentleman complained that regional policy had led to the closing of factories and had disadvantaged the midlands. [Interruption.] He is supported in that view. I am not sure how the hon. Gentleman can then argue that it has not been a success in the regions. One assumes that if it has been disadvantageous to the midlands it has been an advantage to the regions and has led to factories which would not otherwise have done so going to the regions and to jobs being created there.
The evidence is there for all to see if one considers the factory closures that have taken place in the midlands and, indeed, in the south. Major factories such as those owned by Hoover, Firestone and Dunlop have closed, despite not having regional support, for the same reason as branch factories have closed in the regions. They have closed, not because of the ineffectiveness of regional policy, as outlined in the Bill or in previous legislation, but because of the failure of the Government's economic policies. I do not wish to pursue those arguments at this stage, although I could do at some length. No doubt we shall have other opportunities to do so.
I wish to reiterate some of the remarks which I and my colleagues made during earlier stages of the Bill. There are three features of the Bill to which one objects profoundly. The first and most important is that it is clearly the Government's intention to cut regional aid, as other Opposition Members have said. It is clear that the public expenditure cuts which the Government are seeking will go through in the months and years ahead. One need only look at the public expenditure White Paper to see the scale of the future cut in regional aid. For those reasons, we are opposed to what the Government are doing.
I know that the Government say that the Bill only sets the framework for future policy, but this is the second reason why it should be opposed, because it creates uncertainty. I know that in another election campaign in another part of the world they have been asking one of the candidates, "Where is the meat?" The Bill does not have the meat in it. We do not know what the map looks like or what the grants will be, and therefore we cannot make a final judgment on it. We have had a debate which has been shadow boxing around the issue but which has not dealt with the hard core. That will come in future Government announcements, which I hope we shall be able to debate later this year in the Chamber. It is regrettable that we have not been able to debate the complete package of regional policy which the Government intend to introduce.
I wish to deal with the change in the balance of grants toward jobs instead of capital. My hon. Friends and I have

accepted the fact that there is an argument for shifting the balance away from capital expenditure towards jobs, but the hon. Member for Stratford-on-Avon and others have not paid sufficient attention to the benefits achieved by regional policy based on capital grants.
I do not accept, as other hon. Members and those outside this place have, that regional policy has been a failure. However, regional grants have led to features which one can criticise, which is why I support the Government's argument in principle. There have been substantial capital developments on Teesside. Without the regional development support offered under this and previous Administrations, a substantial amount of the industry on Teesside would not have existed. The economy of Teesside is substantially based on the petrochemical industry. ICI's agricultural division is on the north bank of the river, and its petrochemical division on the south bank. Monsanto, BP, Shell, Philips and other firms have also come to the area. As a Member of Parliament for the area for the past decade, as one who has known the area from childhood and as one who has listened to what has been said on the matter, I know that it was regional policy that ensured that some of those industries came to the area—and they are the core of the economy of the area.
It is said on Teesside that those industries are capital-intensive and that they do not directly produce as many jobs as we would like. However, in such an area any jobs are welcome, and the contribution which those industries make to the national economy is also welcome.
I accept in principle the Government's argument for shifting the balance, but I hope that we shall not write off entirely the benefits which capital grants have brought in the past. I hope that in future, in the selective grants which Ministers will be considering, that point will be taken into account.
I welcome Part I. Like other hon. Members, I regret the fact that the two incompatible parts of the Bill have been put together. They have nothing to do with each other and should have appeared as two separate Bills.
We do not wish to vote against the increase in support for the Co-operative Development Agency which the Government propose. As those who study these matters will know, I have been associated with the agency since its inception. I want it to thrive and grow and be even more effective. I hope that as a result of the Government's action the agency will do an even bigger job.
Because we look forward to seeing extra provision made for the agency under the Bill, and because we look forward with optimism to its future role, we shall not vote against the Bill this evening. However, I hope that later in the Session we shall again discuss the subject of Part II and consider the levels of grant and the areas to be covered under the new regional policy. We shall then take a more forceful line than we have been able to take today because of the dual nature of the Bill.

Mr. Kenneth Hind: It has been disappointing to hear in the debate the moans and groans from hon. Members on both sides of the House about regional policy. What hope can we offer to people in towns such as Skelmersdale, which has 30 per cent. unemployment, if we are not prepared to take positive action to assist them with some form of new industry, whether service industry or some other kind?


As the hon. Member for Stockton, South (Mr. Wrigglesworth) grudgingly recognises, the Bill establishes a new criterion for the payment of grant. There is a move from the mandatory, automatic capital grant to the concept of job creation. Many hon. Members will welcome these measures as a tool that will help the worst-hit areas of unemployment to tackle that disastrous problem, giving hope for the creation of jobs in the future.
As the hon. Member for Stockton, South has pointed out, whatever one's views about regional aid it has been of great assistance to the north, the north-west, Scotland and Wales in attracting industry that would not otherwise have gone to those areas. It is all very well for hon. Members representing more prosperous areas to say that we should do nothing about regional policy, but the result would be to create a vast urban sprawl in the south-east in which the vast majority of the population would live while the rest of the country, especialy the north, the north-west and Scotland, developed into an industrial wasteland where very few people live. The Bill comes to terms with that economic reality.
The introduction of grant for service industries is not before time. Writers such as Professor Stonier have made it clear that the trend will be towards service industry jobs and away from manufacturing jobs as high technology takes over in the factories. The Bill recognises the social change that is about to take place in our industries—a change that is recognised by the TUC, many sections of academia, the CBI and many other sections of the community.
The regional development grant scheme itself recognises the relative failure of past attempts at creating new jobs in the regions which have cost £35,000 per job. Emphasis will now be on the vitally important aspect of job creation.
Various ghosts have been laid during the passage of the Bill. First, it has been suggested many times both within and outside the House that there is to be a vast reduction in the amount of aid to the regions. That fear has been expressed by many people in the assisted areas, but they have not considered the discretionary section 7 grants which my hon. Friend the Minister has consistenly emphasised. It has been assumed that there will be less grant to the regions, but the Bill carefully provides for that kind of assistance. Secondly, especially in the north-west, industrialists are concerned that they will no longer be able to benefit from assistance for job preservation. The treaty of Rome and regulations made under it dictate that that is so, but as my hon. Friend the Minister has made clear, modernisation will be a permitted source of grant under the Bill and that may cover a number of things. In effect, we can look forward at least to some—although I say this in a euphemistic sense—preservation of the jobs that have been created in the regions.
The Bill creates greater flexibility. It recognises change both socially and industrially. It recognises the failures of regional development grant and looks forward to the future. Most important of all, if we have a regional development grant we can benefit from the grants from Europe. The point made about home-grown regional policy is valid. The Bill, although limited in movement forward, is a progressive advance against the problems of unemployment and will generate industry in the provinces.

Mr. Fallon: Whatever criticisms and comments I made in Committee, I have no hesitation in supporting the Bill. Considered as a whole, its provisions embrace two themes. The first is the removal of the various distortions and discriminations that successive Governments have allowed to clog the operation of regional policy, and the re-establishment of neutrality between different types of aid, different recipients of aid and between the different areas that are assisted. If it does nothing else the Bill is to be welcomed for those reasons.
The Bill's second main theme is to make it clear that the Government are determined to make more effective use of the resources that have been committed to regional policy. Earlier today we heard that it is not only the totals that are important in regional aid, but the number of jobs that are created for the amount of money allocated. If more jobs can be created from the same resources, if we can eliminate wasteful use of public money and put to an end the misallocation of resources, no one will cheer louder than the north-east.
The north-east has an industrial structure dominated by large businesses and heavy manufacturing industry. It lacks the service industries, research and development and new technology that the Government want to encourage. The changes proposed in the White Paper and the Bill are welcomed in the north-east—they have certainly been welcomed in the submissions on the White Paper that I have seen. Indeed, the changes were foreshadowed by the report of the North of England County Councils Association. My hon. Friend the Minister earlier prayed in aid the Welsh TUC as favouring a more effective regional policy and a better use of resources. He may as well have quoted from the NECCA report—a report from an association dominated by Labour-controlled county councils that might well have been expected to have been critical of the Government. The report sought limits on the amount of regional assistance given automatically to capital investment. It wants savings from limiting the automatic grants and redeploying resources selectively and more widely. It wants regional policy to contain an increased emphasis on the services sector.
The report went to press even before the White Paper was published. In its conclusions it said that
a redirection of policy along these lines need not imply higher costs to the Exchequer than at present but rather the more effective use of resources.
That is the view of the north-east, which welcomes the Bill and stands to gain from the fresh emphasis given to regional policy.
There can be no better proof of that direction and of the potential of the changes proposed in the Bill than the selection by Nissan — between the ending of the Committee stage and our debate today—of the north-east for its site. While a number of tributes have been paid to the various agencies and bodies involved, the one body that has not been thanked for attracting Nissan is the Government —who not only put up £112 million of regional aid—almost one third of the capital cost—but created the climate in which Nissan was free not simply to choose this country in preference to other countries—because of the stable economic conditions created by the Government—but to choose the north-east—it was not directed to it as might have happened under other Governments—for the natural advantages of that region, such as its access to the Community markets, the


availability of a skilled work force and so on. That has shown the north-east that the region will now be able to pull in the footloose international investment that has escaped it in the past.

Mr. Williams: The hon. Gentleman has made a fascinating point about the success of Government policy. Will he explain why, in the case of Nissan, the Government have made special provision in the Bill because, to make the payments that are necessary to get it into Britain and the north-east, they have had to ensure that Nissan is paid under the old system that is being abandoned as it is not covered by the new system that the hon. Gentleman is welcoming?

Mr. Fallon: The right hon. Gentleman said they were special provisions, but they were transitional provisions. The original decision was taken at the beginning of the year and I imagine that the Government wanted to ensure that they did not fall between the two stools of the old and the new policies.
We should also bear in mind the strategic reason why the Government are changing their regional policy to ensure that employment opportunities are more equal. I wonder whether my hon. Friend will note two points. We need to ensure that the arrangements for attracting the international investment, of which Nissan is an example, continue to be reasonably equal. In Committee, I expressed my anxiety at the perhaps excessive influence of the Industry Departments in Scotland and Wales and other agencies such as Locate in Scotland. We do not have to refrain from ridiculing the Labour party's proposals for a north-east agency, a multi-seat executive in the north-east and a Minister for the north-east to show our anxiety and to ask that the agencies in the north-east are kept up to the mark and are as effective as possible in securing investment.
My second point concerns a matter that was referred to in the White Paper and was hinted at in Committee. There continues to be an imbalance in employment opportunities in new and high technology which the Bill alone will not and cannot correct. I know that the Government, in the light of the submissions that they have received, are considering how they can tilt some of the schemes for innovation that they have pioneered towards assisted areas and whether there might be a closer relationship between the academic and industrial worlds in regions such as the north-east. Such a relationship seems to be going rather better in regions such as Scotland. If my hon. Friend can reassure me that this will not be our last discussion of the other matters that were referred to in the White Paper and which were hinted at in committee, I can vote for the Bill with enthusiasm as well as conviction.

Mr. David Harris: I am sure that my hon. Friends from the Whip's office will not begrudge me a few minutes on Third Reading, since I have spent about six hours today travelling in a train from the far west of Cornwall to the House. I mention that simply to illustrate the difficulties that constituencies on the periphery face with regard to regional policy. I ask my hon. Friend the Member for Stratford-on-Avon (Mr. Howarth) to bear that in mind when he gives his opinion on regional policy.
I have always held to the view that an elected representative's attitude to regional policy depends, at

least in part, on the nature of his constituency and its geographical position. If I represented part of the west midlands, I might well argue the case advanced by my hon. Friend the Member for Stratford-on-Avon, just as I argued something like that case when I was a member of the Greater London council. Nevertheless, as a west countryman who has moved back to the periphery, I see the other side of the coin.
My plea to the Minister is to consider the problem of distance. It is important, especially when taking decisions on regional policy. I say without hesitation that I should much prefer to see Government money put into good infrastructure than into discretionary grants. I see the difficulties that discretionary grants pose as between those who are lucky enough to get them and those who are not. That is why I think that, when considering far-flung regions, it is better to put the bulk of the available money into good infrastructure.
I make no apology for returning to the theme of the A30, which is a diabolical road. The best use of regional money, whether it be from the Government or from the European Community, would be to provide decent roads to the south-west of England and to other far-flung corners of the United Kingdom. I know that I speak for other hon. Members who represent constituencies in Cornwall, especially my hon. Friend the Member for Cornwall, North (Mr. Neale), when I ask what is the sense of trying to boost tourism when we have completely antiquated sewerage systems in our tourist resorts.

Mr. Deputy Speaker: Order.

Mr. Harris: I address my remarks, Mr. Deputy Speaker, to my hon. Friend the Minister for Housing and Construction, whom I see in his place on the Treasury Bench.

Mr. Deputy Speaker: Order. The hon. Gentleman must not take advantage. He must confine his remarks to the content of the Bill.

Mr. Harris: With respect, Mr. Deputy Speaker, I confine myself to what is in the Bill in the sense that it deals with regional policy and the best use of our resources, which I know is of paramount concern to the Treasury Bench. I am trying to emphasise the importance of infrastructure in the context of industrial development. We cannot have industrial development without that basic infrastructure. My hon. Friend the Minister for Housing and Construction will see a good example of what I mean when he visits Cornwall—I think tomorrow—to open the Colliford reservoir. Without that reservoir it will be impossible to have the industrial infrastructure with which the Bill is concerned.
My basic theme is that discretionary grants have a part to play, as has industrial development. But, in respect of regional policy, I should much prefer to see the money going into good infrastructure.

Mr. Norman Lamont: Everyone seems to approve of the first part of the Bill, so I shall concentrate my comments on part II, which deals with regional development grants.
The right hon. Member for Glasgow, Govan (Mr. Millan) raised a point about the administration of the scheme, especially in Scotland. He tabled an amendment which would have tried to tease out some of these aspects.


We are currently considering the organisational implications of the new scheme, but I am afraid that we have not yet reached conclusions on it. Obviously the transfer of responsibility for RDGs in Scotland and Wales to their respective Secretaries of State is an option, but we have not yet made any decisions. We are concerned, above all, to ensure consistency of operation across the country. That is essential in an automatic scheme. I am sure the right hon. Gentleman will understand that at this stage I cannot go further than that. I shall bear in mind what he said.
In general the Opposition have failed to demonstrate that the Bill will have the drastic effects which they predict. Indeed, I venture to suggest that in a couple of years people will be wondering precisely what all the fuss was about. The economies in the Bill and its common sense attempt to obtain value for money should obviously have been made years ago. Many people have suggested that a cost per job limit and reduced spending on capital-intensive projects is needed.
Labour Members vastly overestimate the importance and effectiveness of regional policy. They dub this as yet another erosion of regional policy. They say that we have been conducting an erosion of regional policy all the time that we have been in office. That is an interesting point. Unemployment in the regions has not got worse in relation to national unemployment. Labour Members say that that is simply because unemployment has risen in other regions, but they cannot argue that cutting back on regional policy has had a demonstrable consequence in the regions. The statistics simply do not show that. The relative position of the regions has not been damaged or undermined by the changes that we have made.
The Opposition make dire predictions, just as they utter dire words now about the state of industry and the British economy. Listening to them this afternoon I wondered how we managed to win a general election at all if the state of the country is as they described. I wonder how they explain the fact that the business community, despite all the afflictions that we are alleged to pour upon it, continues to support the Conservative party.
There are obviously different views within the House on regional policy.
In its latter stages the debate changed. For most of it I faced an onslaught from the Opposition Benches because we had been making vicious cuts that were destroying regional policy. Now we move into the last act of the play and a new cast has appeared. I find myself being attacked from behind because we are not cutting it enough. Something that fails to please everybody is not necessarily right, nor is mid-point between two points logically or necessarily the right point. That is to use the logic of the Social Democratic and Liberal parties. But we must try to achieve a balance in this matter, and the balance that we have struck in the Bill is the right one.
My hon. Friends the Members for Amber Valley (Mr. Oppenheim) and for Stratford-on-Avon (Mr. Howarth) put the case of the non-assisted areas and it was right that that should be put, even though late in the proceedings. Those areas of the country feel that they have been damaged and have suffered from the distortions of regional policy. That is why we have wanted to minimise job shuffling in our changes and to lessen the distortions that have occurred through regional policy.

My hon. Friend the Member for Stratford-on-Avon was trying to guess a little because, as I stressed in replying to the Opposition, many of the decisions on regional policy have yet to be made. A final judgment on our package cannot be made until all the decisions about the map, rates of grant and qualifying activities have been put together. My hon. Friend says that there has been a modest dilution, while the Opposition say that there has been a savage cut. The answer to both is that we shall have to wait until the decisions are made to see which is the right description.
My hon. Friend picked up the point that was made, echoing the White Paper, that we do not regard the economic case for regional policy as clear cut but that we think there is a social case for it. My hon. Friend sought to disagree with that. If I remember rightly, he said that that cannot be right because the social jobs will only be provided following sound economic conditions and jobs. What my hon. Friend is ignoring, and what I believe to be the situation, is that regional policy has had an effect. The evidence is there that it has had an effect, but the question is at what cost it has had that effect. I do not know whether my hon. Friend has managed to look at the vast volume of evidence and academic studies on regional policy which accompanied the White Paper, but I think he will find there some material of interest, which tabulates some of the effects on regional policy. What it does not establish, of course, is the cost at which that effect has been established.

Mr. Robert Jackson: Does my hon. Friend agree that the question that ought to be asked is how much worse the situation might have been in the regions without the regional benefits?

Mr. Lamont: That is certainly one question, although it is important also to take into account the effect of regional policy on the non-assisted areas. Many of the figures quoted of the cost per job created, or, indeed, of the jobs created, do not always take into account the jobs that may have been destroyed elsewhere, or the jobs that might have come into effect in any case. My hon. Friend has a point, but these questions have also to be considered.
The arguments over selectivity and automaticity were referred to, and it was said that both were unsatisfactory. They may both be unsatisfactory, but we have to choose, whether we like it or not. I do not know of any alternatives to selectivity and automaticity. The model which we will follow will be one in which automatic grants will continue to be the main instrument of regional policy, although a larger part will be played by selective regional assistance. What we are aiming at is a regional policy which is more modest, more streamlined and more effective.
My hon. Friend the Member for Darlington (Mr. Fallon) was right in saying that the measures in the Bill and in the White Paper are more radical than some of my hon. Friends have suggested. We are relating regional policy much more to jobs. We are looking for public expenditure savings. We are not content to go on subsidising the capital-intensive activities which have consumed cash without producing a compensating advantage for the regions. Given that we are to have a regional policy, we think that it is not right to discriminate in favour of manufacturing at the expense of services, and that the policy ought to be more neutral.
These changes are sensible and far-reaching. The Opposition persist in trying to whip up indignation, which


usually comes down to the fact that what they object to is that we intend to secure some public expenditure savings. They are content to point to the levels of unemployment in the assisted areas and say it is outrageous that we should attempt to make any savings on regional policy. "Spend more money," they say. That is typical of their approach, and it is why they will stay in opposition. "Is there a problem? Spend more money." That is their approach. It does not matter that they agree with us that some of the proposals which we put forward for limiting the highly capital intensive propositions are sensible. They will agree with that in general, but when it comes to the amendments they will vote against it on every occasion.
Although the details of our policy will have to be announced after the period of consultation is ended and after all the representations have been considered, I believe that we will have struck the right balance between doing something for the regions, minimising the distortions, and doing it much more effectively and with much better value for money. That is the objective that we have set ourselves, and it is the balance that we intend still to strike. For that reason, I commend the Bill to the House.

Question put and agreed to.

Bill accordingly read the Third time, and passed.

EUROPEAN COMMUNITY DOCUMENTS

TOURIST ASSISTANCE INSURANCE

Motion made, and Question put forthwith pursuant to Standing Order No. 80(5) (Standing Committees on European Community documents)
That this House takes note of European Community Documents Nos. 4335/81 and corrigendum, and 4219/83; and supports the Government's intention to ensure that the scope of the directive is clearly defined, that it provides for appropriate exemptions and that it takes into account the special considerations applying to the supervision of benefits-in-kind insurance.—[Mr. Goodlad.]

Question agreed to.

Orders of the Day — Potato Marketing Board

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Goodlad.]

Mr. Roger Gale: I am grateful for this opportunity to bring before the House a matter of considerable concern to a significant minority of potato growers throughout the country and to a number of my constituents in particular.
Many hon. Members have written to me about the subject. I shall not name them all tonight, but I hope that their constituents will realise that their representations have been expressed. I refer to the operation and future of the Potato Marketing Board.
The board has recently proposed amendments to the potato marketing scheme which, unless an inquiry is held, will commence its parliamentary procedures in the near future.
When introducing that scheme in an editorial in a special edition of Potato News the board said:
The Potato Marketing Board has been working with no substantial change to its operations for fifty years … Over the last ten years the changes in the factors which affect the Board's operations have been more profound than any in the organisation's history—the Board must respond to them.
The demonstrated opinion of about 650 potato growers in the country is that the board's response, based upon a working party report is inadequate to meet their needs. In part, I believe that to be the result of poor presentation and a high-handed attitude by an organisation which many of those who sought my support regard as a self-perpetuating quango.
The report was produced by a working party on which active potato growers were not represented. The active, professional voice was missing from all the party's deliberations. The proposals were presented to the growers in a take-it-or-leave-it fashion.
My hon. Friend the Member for Beaconsfield (Mr. Smith) has kindly made available to me a letter from the Minister, who said:
producers were invited to decide whether or not they wished to hold a poll on the amendments but, in the event, the number requesting a poll fell short of the number stipulated in the scheme.
The House has recently sought to introduce a wider element of democracy to voting systems, especially in trade union legislation. The House may be interested to know that when a special issue of Potato News appeared, poll cards were not issued, nor were return slips and tear-off reply forms sent to registered producers, although the board was able subsequently to circulate every producer to say that there would not be a poll.
Under the existing potato marketing scheme, 1,000 signatures are required from growers with an aggregate potato growing area of 8,000 hectares in order to call a poll. The board's figures show that only 503 signatures were received but that well over the 8,000 hectares were represented. The aggregate area was 10,587 hectares. Ironically, under the proposed amendments to the scheme, both of those figures would fall within the necessary requirements for a poll.
What is more significant, and which has angered many growers, is that all non-voters, including those who were not aware of the option of a poll, were counted as being


in favour of the board. That system has prompted one grower, Mr. Peter Wingrove from Shredding Green farm in Buckinghamshire, to comment,
This is reminiscent of the USSR voting system—or is Arthur Scargill in charge.
It is not suprising that a significant number of potato growers feel that they have been gerrymandered out of what democratic rights they have. It is for that reason, at least in part, that the subject is being aired tonight. Many growers are so angry that they would cheerfully see the board abolished immediately. Only time will tell whether that will become necessary. Having carefully studied the subject, I believe that it is necessary for the fullest and most public inquiry to be carried out into the board's proposed amendments and, through those proposed amendments, the very operation of the board.
We can certainly agree with the board's statement that, in the past 10 years, changes in the board's operations have been more profound than any in the organisations's history. In the past three years, the EEC ruling that the board may not restrict potato imports has struck at the very reason for the board's existence. In October 1980, the potatoes sub-committee reported that this country was likely to remain self sufficient in potatoes for the foreseeable future and that it was the policy of the United Kingdom Government and the National Farmers Union that it should continue to be so. That is no longer the case. In a letter to me dated 24 May, the NFU said,
We believe that the best way to discourage imports is to keep the home market adequately supplied … If the home industry could no longer supply the home market our Continental competitors, notably the Dutch, would take advantage of any shortfall and retain their hold on part of our market, as they have done in West Germany, for example.
Many believe that the free market in Holland has given the Dutch their foothold. They have a free market; we do not. Why else would the Ministry of Defence send Dutch potatoes to the Falkland Islands?
In 1981, the Lincolnshire branch of the NFU was reporting to head office and throwing back at him the words used by the chairman of the board. It described the operation of the potato marketing board as being like a milking stool with three legs; the control of imports, acreage and Government financial support. As he said,
take one leg away and the stool collapses.
Many growers believe that with the removal of the control of imports, the stool has, indeed, collapsed. The Potato Marketing Board claims that for the investment of tens of millions of pounds, it has produced a return for the industry in increased prices of hundreds of millions. There is no statistic that convincingly supports that argument. On the contrary, it would appear that such money spent by the board on buying in domestic potatoes, which have then been sold for stock food, has simply drawn in further imports to compensate for those potatoes bought in by the board.
Further, it is an alarming and irrefutable fact that while some growers of main-crop ware potatoes may have benefited from the operations of the board, the volume of imports, particularly of processed potatoes, has increased dramatically since 1980. There is a grave danger that the potato processing industry — which is of course worth jobs as well as money—will establish its permanent and exclusive base in the hands of our overseas competitors. The Potato Marketing Board claims that the 1983

processors scheme was a benefit to the industry. That is denied by some growers and the major domestic processors alike. The board's new proposals do not address themselves to this vital area, and unless we act swiftly, it will be lost to us for good.
But it is in the area of first early potatoes—the area of most concern to my constituents—that the board's proposals most signally fail to meet the market challenge from the new environment created by the EEC decision. The Potato Marketing Board is ill-named. It is not a marketing board in the true sense of the words. In a recent reply to my parliamentary question, the Minister indicated that in the past 10 years, the total quantity of potatoes marketed by the board for human consumption amounted to less than 1 per cent. of all those eaten in Great Britain.
The board is, therefore, not a marketing board, but a regime. The case for that regime, and for the control of the acreage of ware potatoes is, I believe, as I have indicated, worthy of close examination. But I also believe—and I think that the Minister and I may here find common ground—that the case for that regime is not applicable in any sense to the early potato market. It is in that market that we face the fiercest competition from Greece, Egypt and — slightly later in the year and coinciding exactly with our own crop—from France. Our competitors do not face the acreage restrictions that our domestic growers face, nor are they subject to control of quality. Again, in response to a parliamentary question, the Minister informed me that imports of potatoes into the United Kingdom are not subject to restrictions other than on plant health grounds.
I support a Government who are committed to the free market cause. Nowhere is that free market perhaps more applicable than in the early potato sector. The free market case may well have the support not only of the Ministry but of the executive of the NFU as well. Yet again, the new board proposals do not address themselves to this, even as a possibility. Instead, there are indications that there may be a levy rebate of 75 per cent. on potatoes lifted by the end of June and, to quote the NFU——
a more liberal attitude on the part of the Board to applications by early potato producers for extra quota on a year-to-year basis.
It is worth pointing out immediatelly that a 75 per cent. rebate of a levy that is under the same proposals due to increase dramatically, will leave the early potato growers little, if any, better off than they are already. The proposals for an increase in acreage are wishy-washy to say the least. We are therefore faced with the fact that the best growers in the world, growing in Thanet the best product on the best land are restricted, and will continue to be restricted, unless the Minister acts, to growing their quotas and standing idly by while the import of an often inferior foreign product supplies the market that they could supply.
The growers' suggestion is that they should remain affiliated to the board and pay a registration fee to allow the board to monitor production and consumption, but that they themselves—the best arbiters of their trade—should be allowed to decide what quantities they grow. That seems a reasonable request and is entirely in keeping with free market Conservative policy.
In conclusion, I urge my hon. Friend the Minister to instigate a full inquiry into the board's proposals; to ensure that the growers are properly represented at that inquiry; to address his Department particularly to the alarming growth in the import of processed potatoes, and to the introduction of strict grading controls over imports so that,


at the very least, both main-crop and early growers are comparing and competing like with like, and the early growers are given a free handto satisfy our needs and produce the crop that they and we both know they can produce so well.

The Minister of State, Ministry of Agriculture, Fisheries and Food (Mr. John MacGregor): I am grateful to my hon. Friend the Member for Thanet, North (Mr. Gale) for providing this opportunity to discuss the Potato Marketing Board and the scheme which it administers. As he will recognise, there is a difficulty of timing for me about answering all the points he made because there may be a public inquiry into the board's proposed amendments on which Ministers will eventually have to decide. It would, therefore, be wrong of me to prejudge any of the issues.
It might be helpful if, first, I were to recap on the statutory procedures for amending the potato marketing scheme and comment on the Government's proposals for potato market support in the future. In so doing, I hope that I shall be able to cover some of the points that my hon. Friend raised, and at the end I shall deal with two of the specific matters.
It is worth stressing at the outset that the Potato Marketing Board is a producer organisation which is independent of Government. It has been in existence, at the wish of registered potato growers, for 50 years. The procedures for amending any of the provisions of the scheme are laid down in the Agricultural Marketing Act 1958. The Act provides that before the board can submit any proposals to Agriculture Ministers for amending the scheme it must publish its proposals to all registered potato producers.
As my hon. Friend said, the scheme obliges the board to hold a poll of producers—on the question whether the proposed amendments should be submitted to Ministers—if one is demanded within one month of publication by at least 1,000 registered producers who have in aggregate a potato area of at least 8,000 hectares. To put the numbers in context, I should add that there are over 25,600 registered producers.
The Agricultural Marketing Act 1958 makes similar provisions with regard to revocation of the scheme. A poll on whether or not the scheme should be revoked must be held if demanded by at least 1,000 registered producers having in aggregate a potato area of at least 8,000 hectares. Revocation would follow if demanded by at least 50 per cent. of producers voting, representing one half of the potato tonnage of those voting.
The Potato Marketing Board published proposals for amending the scheme on 12 March by serving notice on every registered potato producer. Subsequently, members and staff of the board, together with representatives of the farmers' unions, attended a series of meetings held throughout Britain at which they explained the purpose of the amendments and responded to growers' questions. I gather that many, if not all, of those meetings were well attended.
The board has subsequently announced that in the period of one month following publication allowed to enable producers to demand a poll, it received demands for a poll on whether the amendments should be submitted to Ministers from 503 registered producers, as my hon. Friend said, who grew a total of 10,581 hectares. Some

producers demanded a poll on revocation of the scheme and some called for polls on both issues. A total of 653 producers having 12,342 hectares made demands in one form or another.
As the demand for a poll fell short of the statutory minimum requirement of 1,000 registered producers having in aggregate 8,000 hectares, the board decided not to hold a poll—it was entirely within its prerogative to take such a decision, and Ministers could not interfere — and instead submitted the proposed amendments to Ministers on 18 April.
To comply with the Act—this is the second stage—following receipt of the amendments, Ministers must publish in the Gazette a notice acknowledging receipt of the amendments, stating where copies could be obtained or inspected, and specifying a period of not less that six weeks during which objections and representations could be made. Objections must be in writing and state the grounds of objection and the specific modification required to the amendment. That is important because some of the representations that we have received have not stated the grounds of objection and the specific modifications. I am grateful for this opportunity to point that out again. I have no doubt that my hon. Friend will be pointing that out to those of his constituents who are objecting to the proposals.
The notice was published early last month in the London and Edinburgh Gazettes and in newspapers and periodicals that are likely to be read by potato producers. The closing date for receipt of objections is 22 June. My hon. Friend's constituents are free to submit their objections and it is important that in so doing they state the specific modifications that are required. I am grateful to him for initiating the debate and providing further publicity of the opportunity that is available to producers to submit their objections. The notice tells them what they must do to make their representations valid and in a form that is likely to lead to possible action.
The Act also requires Ministers to direct that a public inquiry be held if any valid objections are made and Ministers do not propose to modify the amendments to meet those objections. Having considered objections and representations, together with the report of any public inquiry, Ministers may then decide to modify the amendments or, if they are satisfied that the amendments will lead to the more efficient operation of the scheme, and if there has been a public inquiry, lay a draft order before both Houses for affirmative resolution.
I apologise for having taken some time to go over the legal framework in some detail, but it is clearly fairly complex. I believe that it illustrates clearly that there are a number of opportunities along the way for those who dislike or positively object to any proposed changes to make their views known fully to Ministers, and for Parliament to debate any amending legislation.

Mr. David Harris: Will my hon. Friend acknowledge that this procedure comes at the precise time when most potato growers are lifting potatoes? Probably the last thing that they want to do is write to him or to the authorities in compliance with the procedures which he has rightly outlined. It is the most inconvenient time for growers.

Mr. MacGregor: I have a great deal of respect for my hon. Friend. I very often agree with him, but I must say


on this occasion that if this matter is so important to the future of potato growers, as some of them are saying, a little time spent on taking advantage of their proper democratic and statutory rights now must surely be one of the things that they should put at the top of their list of priorities. It cannot take so long to write one letter provided that they adopt the proper form or procedure. However, I am grateful for the chance to say once again that this is the time to do it.

Mr. Kenneth Hind: rose——

Mr. MacGregor: I hope that my hon. Friend will forgive me for not giving way to him. I have a number of points to make in response to my hon. Friend the Member for Thanet, North. I hope that my remarks about a public inquiry will deal with my hon. Friend's first point. The opportunity for such an inquiry is still in front of the growers and parliament and it is up to the producers to determine whether it is taken. The trigger is in their hands.
There is no question of amendments being forced through against the wishes of the majority of the growers. The opportunity to object or to complain about the effects of the scheme does not arise only when an amendment is proposed. The opportunity to do so is an integral part of all marketing schemes. The scheme provides for arbitration if a producer is aggrieved by any act or omission on the part of the board or, failing agreement, to be appointed by Ministers. Section 19 of the Act enables Ministers in certain circumstances to direct that a committee of investigation report on any complaint about the operation of the scheme. My hon. Friend will appreciate that the Agricultural Marketing Act imposes quasi-judicial responsibilities on Ministers, including the responsibility that we may have to come to a decision on all the issues that he has raised this evening. I hope that he will understand that it would be wrong for me to make any comment beforehand on a subject that may give rise to the statutory procedure being invoked and which might, therefore, prejudice the outcome.
Having dealt with the public inquiry, I turn to the part the Government have legitimately played in recent events. As my hon. Friend knows, from time to time the Government act jointly with the board over market support arrangements. As I informed the House on 28 February, the Government have reviewed certain aspects of the support that is provided for potatoes.
I should like to explain more fully what we have in mind for the future and why we considered that some change to the present arrangements was necessary. We start from the position that there is no common organisation of the market in potatoes under the common agricultural policy. In the absence of a Community regime, member states therefore remain free to operate their own national arrangements subject only to their keeping the Commission informed of the measures adopted. Our present system of support for potatoes is based on powers contained in the agriculture legislation of 1947 and 1957 to provide guaranteed prices or assured markets. Although our support arrangements have evolved over the years they remain founded essentially on the annual determination of a guaranteed price and the making of a deficiency payment if the price received by producers falls below the level of that guaranteed price.

In deciding to review the way that market support has operated for potatoes the Government had in mind two major considerations. First, the maximum amount of the levy that the board can raise from producers is currently linked by formula to the level of the guaranteed price which has been held steady since 1978. It is for the Government to fix that guaranteed price after full consultation with all concerned. The board's scope for raising income has thus been curtailed over recent years. This became especially apparent during the 1982 maincrop potato season when the board's financial resources proved insufficient to meet its share of the cost of market support and it had to have recourse to a Government loan to enable it to meet its contractual obligations to growers.
The second major consideration leading to the review of support arrangements was the Government's wish to limit the extent and open-endedness of our financial commitment to market support for potatoes. The House will appreciate that, as potato support expenditure depends on supply and demand, it is extremely difficult to predict the likely call on public funds in any particular season. In addition, the deficiency payments system is potentially a very costly one to operate in seasons of heavy surplus. For each £1 that the average price falls below the level of the guaranteed price the potential cost to the Government is about £5 million.
The first option that the Government considered in the review—I come to a point made by my hon. Friend—was whether to dismantle support arrangements altogether and to introduce instead a free market for potatoes. I do not disguise the fact that that idea had its attractions, but there were other considerations, such as the highly volatile nature of the potato market, the potentially large annual variation in potato yields and other considerable pressures facing farmers in other commodities.
The Government concluded that a sudden switch—I emphasise the word "sudden"—to a free market in those circumstances after the long history of that different system could significantly increase the chances of price instability, adversely affect production and consumption and have a serious impact on imports. The evidence of the drought years of 1975 and 1976 showed how badly consumption can be hit by very high prices and how long the recovery process takes. In addition, years of very low prices can reduce producer confidence in the crop and lead to substantially reduced levels of planting and production in the following season, and hence again have an impact on imports.
The Government therefore concluded that stabilisation of the potato market within a limited managed market framework would help to avoid disruption, retain producer confidence and thus give consumers a reasonable assurance of supplies at reasonable prices.
Following detailed discussions with, and in the light of the representations over 18 months from, organisations representing a wide range of interests within the potato industry, including the potato growers action group—I believe that my hon. Friend will have seen from a reply to a question he asked my right hon. Friend the Minister of Agriculture, Fisheries and Food that there was widespread consultation with many organisations, and hence with many producers—I was able on 29 February to announce the Government's revised proposals for potato support arrangements. Those arrangements are to take


effect from the 1985 season. They represent a considerable shift from the current arrangements, but, nevertheless, they were widely welcomed within the industry.
The Potato Marketing Board and the farmers' unions have undertaken to recommend their members to accept the package we have offered. The key elements in the package are a substantial increase in producer contributions to the cost of support buying and a shift in responsibility for those costs on to producers in years of average surplus; the removal of the Government's obligation to make deficiency payments; and the limitation of the Government's share in support buying to years of exceptional surplus only.
That is very much a move to a freer market responding to the pressures of the market place. I have made it clear to the Potato Marketing Board that it should see the matter in that light also. My hon. Friend referred to processors. Processors have been closely involved in the review of existing support arrangements, and I have encouraged them to forge closer links with the board. They are together studying opportunities for joint co-operation to promote the uptake of home-grown potatoes by this growth sector and thereby preserve the health of our potato industry. Although it is up to them to discuss and to carry through measures for joint co-operation, I am taking a close interest.
I shall deal with two of the other points that my hon. Friend made. He asked about grading controls on imports. That was a point that the NFU representatives made when they came to see me about the details of the scheme and the Government's support. I have undertaken to study the matter and I hope to be able to say something about it shortly.
My hon. Friend mentioned early growers. I shall draw my hon. Friend's anxieties to the chairman of the Potato

Marketing Board. It is a matter within the board's competence. Ultimately the board is responsible to, and must respond to, its growers. I know that it is aware of the anxieties of early growers and is drawing up proposals under which additional basic area can be allocated annually to first early growers.
The aim of these measures is to put the Potato Marketing Board on to a sound financial footing for the future and to reduce the cost to public funds of potato market support in the longer-term. The new arrangements will be reviewed after five years, by which time it is hoped that the board will have built up sufficient reserves to make it as nearly as possible self-financing. Certain of the amendments that the board is proposing to make to the potato marketing scheme — and here I am thinking particularly of the proposal to increase the producer levy—clearly form an integral part of the support package for the future. That is why it has been so important for the industry to debate the issues fully and to decide what system of support it wants for the future.
My hon. Friend has stressed the views of some growers. I cannot tell at this stage how many. He can be assured that his constituents and other people who have put points to him will have an opportunity until 22 June to make their views known, to propose modifications, and to see whether they can persuade sufficient growers to back them to show that they carry support. If the amendments proposed by the board receive the necessary approvals of the industry and then of Parliament over the next few months we shall, seek the approval of both Houses to the necessary enabling legislation and have further opportunities to return to the matter.

Question put and agreed to.

Adjourned accordingly at twenty-three minutes to One o' clock.